Introduction to Re-financing

Re-financing can be a very beneficial money saving exercise. It is worth your time to shop around for the best possible interest rate, and remember that it's the underlying rate that counts, after fees are accounted for, sometimes known as the comparison rate.If you want additional features, look for a low interest rate loan that has them. Paying an extra 0.5 per cent interest for a loan with features that may save you money, but the higher rate may end up costing you more than you'll save.

It all depends on your overall financial situation because sometimes the extra features are necessary to achieve your tax and investment objectives, so these are issues which should be considered as well. Speaking to a financial adviser can help clarify what type of financing would benefit you most.

You may incur termination fees for exiting your current loan early, and for fixed rate loans, in particular, these fees can be high. You will also have to pay the lender's legal fees for discharging the mortgage over your property, fees and costs associated with the new loan (application fees, stamp duty on your new mortgage, valuation and legal fees).

If you're thinking of refinancing, you must do a full check of all costs and fees to make sure you would not be better off staying with your existing loan. Speaking to a mortgage broker can help you understand this process, and will be able to help you find out whether or not you are better off refinancing or staying with your current lender.

Whether your choose to refinance or stay with your existing lender - or even renegotiate with them to find a better deal, the same principles still apply. Sacrifice, early on preferably, pays huge dividends. Only a few spare dollars can help you make huge inroads, if you are willing to form the right habits. If you are not willing to make the sacrifices necessary, then no amount of tricks and tips are going to help you.