Changing Home Loans

What Does Changing Home Loans Mean?

Switching home loans means moving from your existing mortgage to a new one that may better suit your needs – either with your current lender or a different one. It typically involves refinancing to access improved rates, loan features, or conditions. This change can be driven by personal circumstances, interest rate movements, or a need for more flexible repayment options.

What Are the Benefits of Switching Home Loans?

Here are some ways a new loan could help you reach your goals faster or reduce financial pressure:

Secure a Lower Interest Rate

Even a small drop in your interest rate can result in substantial savings in the long run.

Access More Flexible Features

Options like offset accounts, redraw facilities, or extra repayment ability may provide greater control over your loan.

Adapt Your Loan Structure

Switching lets you move between fixed and variable interest rates, or even split the loan to balance risk and flexibility.

Improve Your Cash Flow

Refinancing could assist in reducing your repayments or extending your term to ease short-term pressure.

Change Your Loan Purpose

If you’re converting your property to an investment, switching to an investment loan might be better aligned with your new goals.

What Are the Risks Associated with Changing Home Loans?

While switching can be beneficial, it’s important to understand the potential downsides before making a move. Here are a few common risks to consider:

Upfront Costs and Fees

You may need to cover break costs, discharge fees, or application fees, which can add up and reduce your overall savings.

Lender’s Mortgage Insurance (LMI)

If you have less than 20% equity, switching could lead to additional LMI costs – even if you’ve previously paid it.

Longer Loan Term Trap

Some lenders may offer a full 25- or 30-year term again, which might increase total interest costs unless you negotiate.

Interest Rate Trade-Offs

A waived fee could be accompanied by a higher rate, so watch for offers that sound too good on the surface.

Credit Score Impact

Applying for a new loan will trigger a credit check, though this impact is typically minor if your credit rating is healthy.

How To Switch Your Home Loan, and What Should You Consider First?

Changing home loans can be a beneficial move, but it’s important to approach it with a clear plan and a good understanding of your options. Below are some steps and aspects to consider before deciding whether switching is right for you:

1. Clarify Your Goals: Are you chasing lower repayments, looking for more features, or aiming to pay off your home sooner? Knowing what you want can help guide your decision-making.
2. Evaluate Your Current Loan: Review your interest rate, fees, and features. Check if exit or break fees apply and how much equity you’ve built.
3. Talk to Your Lender: Let your bank know you’re shopping around – they may be willing to match or beat competitor deals to keep your business.
4. Compare Alternatives Carefully: You can engage a mortgage broker or use a comparison tool to weigh up rates, fees, and features across multiple lenders. Don’t be swayed by offers that seem attractive at first glance without checking the details.
5. Run the Numbers: A mortgage switching calculator can provide a helpful estimate of whether you’ll actually save once all costs are included.
6. Apply for Your New Loan: If you decide to proceed, prepare your documents and start the application. The full process typically takes between four to six weeks, depending on your circumstances and lender timelines.

Refining Your Home Loan Strategy with Ausfirst Lending

You’re not obligated to keep the same home loan for the life of your mortgage. As your circumstances evolve, whether you’re planning a renovation, growing your family, or transitioning to remote work, your mortgage may need to adapt, too. Reassessing and switching your loan can potentially help you regain control, improve flexibility, or access features that better reflect your current lifestyle and financial needs.

At Ausfirst Lending, we believe that your home loan should support your goals – not hold you back. Our brokers take the time to understand your situation and recommend refinancing solutions that may be a better fit for your life changes. We’ll guide you through the process of changing home loans, from comparing loan products to managing the paperwork, so you can feel more confident in your financial decisions.

Why Choose Ausfirst Lending Group

Dedicated Guidance and Comprehensive Service

At Ausfirst Lending Group, you are our top priority. We are dedicated to providing comprehensive assistance from start to finish, not just because we are legally obligated to act in your favour, but because we genuinely want to ensure your success.

We focus on your objectives and requirements, and combine deep industry knowledge with a strong commitment to finding loan options that truly align with your financial needs. We simplify the entire loan application process by assessing your borrowing capacity, organising documentation, and negotiating terms on your behalf, all while securing the most favourable outcomes for you.

Extensive Lender Options

One of the key benefits of working with Ausfirst Lending is our access to a diverse range of lenders. Instead of presenting just one option, we assess a broad array of options according to your financial needs. This allows us to tailor solutions that match your specific goals and circumstances, ensuring you get the best possible outcome.