Is now a good time to refinance?

Inflation seems to be headed in the right direction, but Reserve Bank of Australia Governor Michele Bullock says a near-term cash rate cut isn’t on the cards.

So, where does that leave homeowners wondering whether now is a good time to refinance?

The decision as to whether to refinance depends largely on your individual situation and goals. Here are a few key considerations to think about when deciding whether or not to refinance.

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The latest inflation data was promising

In case you missed it, in Q2 2024, the consumer price index (CPI) rose by 1%, driving annual inflation to 3.8%, up from 3.6% in Q1. Despite this, the trimmed mean measure of underlying inflation has declined for six consecutive quarters, indicating a downward trend overall.

The Reserve Bank of Australia (RBA) aims to achieve inflation within the 2% to 3% target range by late 2025.

Recently, the RBA decided to keep the cash rate steady at 4.35%, with Governor Michele Bullock stating that a near-term rate cut is unlikely.

So, should I refinance now or wait it out?

Without a crystal ball, it’s hard to know exactly when the RBA will cut the cash rate. However, refinancing may make sense if you fall under any of the following categories.

1) You’ve been with the same lender for a long time

Refinancing can be onerous, but it could be worth the effort. If you’ve had the same home loan for several years, chances are you could be getting a more suitable offer with another lender.

2) You’ve never heard of a redraw facility or offset account

Refinancing can help you reduce interest and gain financial flexibility. For instance, a redraw facility lets you make extra mortgage repayments while still accessing those funds if needed. Alternatively, an offset account links a transaction account to your mortgage, offsetting deposited funds against your loan balance to lower interest costs.

3) Your situation has changed

Have your financial circumstances changed since you took out your original home loan? If so, all the more reason to consider refinancing to a home loan that marries with your current financial situation and long-term objectives.

4)  Your debt is feeling unmanageable

If you're managing multiple debts, like a personal loan and credit card debt, consider debt consolidation. This combines all your debts into your home loan, simplifying repayments to one monthly payment. Keep in mind that this may result in paying more interest over time.

Contact us, and we'll help you calculate the best option.

5) You want to access your equity

Want to make a big-ticket purchase, like buying an investment property or doing a home renovation? Refinancing can help you achieve these kinds of goals.

Like to know more?

We can help you work through all the options out there and find you a home loan to suit your specific circumstances and goals. 

Book a 10-minute chat or feel free to call us at 1300 780 440