How Refinancing Can Save You Money

For most people, their mortgage is their biggest financial commitment. It follows that streamlining the largest debt can produce the largest savings.

If you're the kind of person who shops around to get the cheapest television, then you're missing a big opportunity by not using the same skills to save money on your mortgage.

To give you some idea of the savings available to you, imagine you had a mortgage for $500,000 and were currently paying an interest rate of 6% per annum. If you were to refinance this loan to an interest rate of 5% p.a., you would save $5,000 in interest repayments each year.

Over the life of a 30 year loan term, the savings would be enormous. And, you may not even have to move your mortgage to another lender to get a better deal. Before you go anywhere, ask your current lender for a better offer.

If you do need to move, remember that, although refinancing can save you money, it's not something to be done in haste. You may have to pay exit fees and other fees to your current lender, as well as fees to establish a loan with a new lender.

By using a reputable mortgage broker to advise you, you will be able to work out whether or not it's worth moving lenders.