Home Loan Refinance

Before deciding if this is the right solution for you, you need to weigh up the pros and cons. Debt Negotiators is here to help. Our expert mortgage brokers understand the ins and outs of refinancing your home loan to consolidate debt and can help you find the solution that’s best for your budget.

Is it common to refinance a home loan in Australia?

Homeowners across Australia are refinancing at an all-time high, with much of this growth being attributed to owner-occupiers looking for better deals according to The Australian Bureau of Statistics.

Many choose to refinance when their introductory or fixed rate period expires. Sometimes when the fixed term expires, homeowners are left with a standard variable interest rate that is higher. Whether they negotiate their current loan with their old lender or move on to a new lender, they may significantly reduce their home loan repayments by refinancing.

Some also refinance to consolidate debt for lower interest rates and thus lower interest repayments. Again, this can be done with an existing lender or a new lender.

Can I refinance my mortgage to consolidate debt?

If you feel like you’re drowning in debt and own property, consolidating your debt by refinancing your mortgage may help you get back on your feet. You can consolidate a range of small debts, such as your car loan, credit cards, overdrafts, personal loans, ATO tax bills, equipment or furniture purchases and/or a home loan, into one.

A home loan is usually available with a substantially lower interest rate than credit cards or personal loans, making this an efficient and often more convenient way to pay off your debts. You may also be able to lengthen the term of your loan to reduce the monthly payment so it is more manageable.

Should I refinance my home loan?

Having multiple loans or debts equates to having multiple payments with different interest rates that need to be managed monthly. If any of these debts have variable interest rates, then budgeting for them could be difficult and time-consuming. By rolling all those debts into a new refinanced mortgage, you can reduce both your monthly repayments and your interest rate on that repayment making them more affordable.

Is it a good idea to refinance my home loan to consolidate debt?

To refinance your home loan you need to negotiate a good deal with a financial institution or bank who are willing to refinance you for both your home loan and your additional debts. When looking at this option, you need to consider the cost to refinance, such as the standard fees and charges, lender fees, interest charges, break costs and exit fees.

Debt Negotiators is here to help you source the most affordable mortgage-refinancing loan so that you get competitive rates and an affordable monthly repayment. Before you start, you need to consider your options carefully.

What are the drawbacks of home loan refinance?

There are costs associated with refinancing your home loan.

• Consider the long-term impact. You’ll be paying small debts off over a longer term, such as 25 to 30 years, and may end up paying more interest than other options.
• There may be additional costs involved which could include break costs or exit fees for your current home loan; an application fee and ongoing fees and charges for your new home loan; and your loan changeover may incur government duties and taxes.

You can use our debt consolidation calculator to help you estimate monthly loan repayments.

Will a debt consolidation loan hurt my credit score?

The initial enquiry to get your new debt consolidation home loan may initially hurt your credit score. However, paying off all your other debts and maintaining regular monthly payments on your new refinanced-mortgage will improve your credit score over time.

What are the alternatives to a debt consolidation home loan?

If you don’t own a property or are unable to arrange mortgage refinance for debt consolidation, don’t despair. There are other options available. In order to bring your debts under control, you can also consider;

• a Debt Management Plan
• other options to consolidate such as consolidating your credit cards into a personal loan
• Informal and Formal Debt Agreements
• A Personal Insolvency Agreement (PIA), also known as a Part 10 Agreement
• Filing for Bankruptcy as your last resort.

Debt Negotiators offers a free financial advisory service to help you review your debt relief solutions and identify a way to get debt help tailored to your current personal financial circumstances.

What types of debts can be consolidated into a home loan?

You can consolidate a range of small debts such as:

• credit cards
• Overdrafts
• car loans
• personal loans
• ATO tax bills
• equipment or furniture purchases.

Will I get approved for a debt consolidation home loan?

Getting and being approved for a debt consolidation home loan will depend on your financial circumstances and your credit rating. Start the process by getting free assessment from a financial counsellor who can review your situation and provide you with the best debt consolidation options for you.

Can I refinance my home loan with bad credit?

As with any other type of loan, there are eligibility criteria. Your credit score is going to impact your debt consolidation loan options. However, it is rare that a new debt consolidation home loan cannot be obtained. Having a bad credit score is unlikely to affect your ability to get a secured debt consolidation home loan, as it will be secured against your house. This makes it less risky for the lender.

The biggest impact of your poor credit rating will be the impact it has on the terms of the loan and the interest rates charged. Your bad credit score presents a risk, that means you will typically have higher interest rates offered than if your credit score was good.

How much does a debt consolidation home loan refinance cost?

The length of your loan and your monthly interest rate will impact the final cost of your home loan, as well as the additional application, valuation and deferred establishment fees. Rates will vary depending on your independent situation and the risks involved.

Use our debt consolidation calculator to calculate the cost of your refinanced home loan.

What are the rates for a debt consolidation mortgage?

The interest rate available to you for your refinanced mortgage (home loan) will really depend on your current credit rating and the home loan lenders. Contact us today to explore your options.

When should I refinance my home loan?

If you’re struggling to pay off your debts because they’ve built up over time, or you’ve had a change in circumstances such as losing your job or illness, and you own a property, then home loan refinancing may be the solution for you. It has the potential to ease the burden of interest repayments.

How can Debt Negotiators help with home loan refinancing?

Before making a decision on whether refinancing your mortgage is the right thing to do, we recommend you discuss your financial situation with an independent consultant. Debt Negotiators can help. We have independent consultants who are able to offer impartial advice using our in-depth knowledge of the law, debt processes and options.

Our process starts with a no obligation, free financial assessment so we can fully understand your financial situation and create a budget for you. This will enable us to offer impartial advice based on your needs. Debt Negotiators can help you source the most affordable and competitive home loan refinance options, negotiate on your behalf and help you to consolidate your debts.