Ask yourself these 15 questions before refinancing

Refinancing your mortgage can make sense in the right circumstances and if you do your homework.

Answering “yes” to one or a few of these questions should encourage you to consider refinancing your mortgage:

1. Do you want to reduce your monthly repayments?

2. Do you want to switch from a variable rate to a fixed rate, perhaps because you want to reduce the risk of higher repayments if interest rates rise? Or do you want more certainty about repayments?

3. Are you dissatisfied with the service provided by your current lender?

4. Is your current interest rate not as competitive as other lenders’?

5. Would you be better off with a cheaper rate with fewer loan features?

6. Would you benefit from changing to a loan with more features (e.g. offset account, re-draw facility)?

7. Would you prefer to pay off your home loan sooner?

8. Have your circumstances changed since you first took out your loan (e.g. you have started a family)?

9. Are you considering buying an investment property?

10. Do you think that debt consolidation might benefit you (e.g. consolidating your credit cards and personal loans)?

11. Are you planning any home renovations over the next few years?

12. Do you want to raise cash (by topping up your loan) so you can, for example, purchase a car, buy shares or take a major holiday?

13. Do you have a fixed-rate home loan that will expire soon?

14. Do you have a honeymoon rate that will soon revert to the standard variable rate?

15. Are you coming to the end of an interest-only loan term?