Is your home loan like this prickly cactus?”

cactusA recent survey of 1000 home owners by a very well-known broker chain showed that 40% had never refinanced – 19% had not refinanced in more than 5 years- 6% had refinanced 4-5 years ago- 8% had done so 3-4 years ago and 10% had between 2-3 years ago.

In a lending environment where rates are low- an outstanding 83% of Australians with a home loan had not refinanced in the past 2 years.

Using the analogy of a cactus-my question is – is your home loan like a prickly cactus? You put it in the corner and forget about it because if you have to change it, it will mean hassle- paperwork- more hassle- you do not know where to start- then, there could be fees that you do not understand- all those prickly spines causing you pain when you touch them….

The worst is — you believe your home loan is no longer suitable for you-

  • All the adverts on TV are showing an interest rate way lower than yours.
  • Your circumstances have changed (you had a baby – changed your job and got a big increase in salary)
  • You want extra features like an offset account or a redraw facility.
  • Your Fixed rate (from 3 years ago) is coming to an end
  • You have rocked up a high credit card when you were made redundant and would like to consolidate that debt.
  • You have equity in your home and are thinking of buying an investment property.
  • You are thinking about undertaking some renovations on your house.


Like the cactus outgrowing its pot and needing some extra sunshine- your mortgage is no longer a fit and needs a review!

Let’s take an example – consider a $400,000 loan at 4.79% — repayments for the next 25 years will be approximately $2,290 pm- BUT if you can refinance to a more competitive rate of 3.79% then your repayments will decrease to $2,065- a healthy saving of $225 pm and $67,332 over the 25 years. (Assume no fees in both loans).

Before deciding to refinance, you should make sure the potential benefits to you outweigh the cost of finishing one loan and starting another. Generally, you should be a couple of years into your existing loan before you can refinance.

If you do not have time- if you do not have the expertise- if you think that the whole process is too much of a hassle- speak to a mortgage broker and let him / or her investigate a refinancing deal for you. Your broker will run the numbers with you and can weigh up your costs (Discharge- establishment fees etc) and savings on your behalf so you can make an informed decision. With lenders offering refinance rebates, you can save even more putting more money in your pocket now just in time for Christmas.

Today is the right time to refinance-Moving the cactus from one spot to the better sunbathed spot achieved great results- Save yourself TIME as well as MONEY and get a homeloan that is better for your own particular goals and circumstances.

(Written by Corinne Jacquin- Mortgage Broker- Lending Specialist – from Ma Maison Advisory Services- Credit Representative No 478751- Authorised under eChoice Home loans- Credit Licence no 390502)