Should you refinance your existing home loan or stick to the one you already have? It can be challenging to decide which the right option might be, especially with so many lenders advertising such competitive interest rates.
However, just because another bank or lender offers a lower interest rate doesn’t necessarily mean you’ll end up saving money by refinancing your mortgage to a new lender. The key to determining whether or not you should refinance your home loan is to weigh up the pros and cons and understand all the costs involved.
Here are some things to think about before making a decision to refinance your mortgage.
Obviously, the interest rate you pay on your home loan will play a role in determining whether you should refinance or not. If your current lender’s interest rate is no longer competitive, you could potentially switch to a different lender and save thousands of dollars on interest charges.
Besides, paying less interest on your outstanding mortgage balance each month could also mean reducing your monthly repayments. If your current lender isn’t willing to negotiate for lower interest rates, it might be time to refinance over to a lender with more competitive rates.