I admit that even after I found out that we could be paying a lower interest rate – I still wasn’t 100% sold on changing loans. I assumed it would involve filling in lots of forms and paying fees - all that stuff.Like many home owners, Freya didn’t think twice about her home loan. She happily made her repayments each month and went about her business.
But was Freya missing out on life-changing savings? Spoiler alert: yes!
“I’d never really paid much attention to what was happening in the world of finance and I had no idea what my interest rate was. In fact, I didn’t even really know what the official cash rate meant.”
Freya and her partner had taken out their home loan two years prior and felt like they’d got a pretty good rate.
“At the time we had a little look around and found what we thought was a decent variable home loan package, but neither of us really knew much about home loans.”
It wasn’t until Freya saw a home loan ad on TV, that she realised the interest rate they had taken out two years earlier was now considered quite high.
I admit that even after I found out that we could be paying a lower interest rate – I still wasn’t 100% sold on changing loans. I assumed it would involve filling in lots of forms and paying fees - all that stuff.
Freya had serious concerns about swapping lenders and it almost stopped her from moving forward.
“Really, I look back now and think it’s kind of funny that I was worried about swapping lenders because it was so easy.
Literally, we called up the new lender to find out more, and they offered to send someone out to our house for a chat, which was awesome. And then they just handled everything from there, we didn’t even have to have an awkward chat with our old lender to tell them we were leaving.”
So this is when things got real! Freya did her calculations…
Old variable rate – 3.83%
New variable rate – 2.59%
Refinance cash back – $2,500
Refinance costs (incl. govt fees) – $950.00
Based on Freya’s $300,000 home loan.
Monthly – $204.00
Annually – $2,448
Loan lifetime (30 years) - $73,440 (or $74,990 if you add the $2500 cashback, minus the $950 refinancing costs)
So, the cash back offer we got for refinancing our loan well and truly covered our refinancing costs, in fact, we had over $1,500 left which we put towards our new 4WD!
“It sounds really cliché, but refinancing has honestly changed our lives because it’s given us some wiggle room. It feels like we actually have a life again and get to enjoy doing things that we couldn’t afford to do before – just simple things like going out for dinner more often or weekend trips away.”
Want to find out more?
If you are interested in refinancing your home loan, we’re more than happy to walk you through the process.
So why not make an appointment with one of our friendly Mobile Lending Managers by phone, email, video call or home visit. Or call us on (08) 8202 7777 or visit us at 400 King William Street, Adelaide between 8am – 8pm weekdays or 8.00am – 2.00pm Saturdays.
This is general advice only and doesn’t take into account your objectives, financial situation or needs. Conditions, fees and lending criteria apply and are available on request.