Home Loan Refinance

Refinance your home loan to take control of your finances

When you refinance your home loan, you take out a new home loan (preferably with better terms) and use this new loan to pay out your current home loan as well as any of your other high-interest debts. In this way, you can consolidate your current monthly debts into a single repayment.

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.

Can I refinance my home loan to consolidate debt?

If you feel like you’re drowning in debt and own property, consolidating your debt by refinancing your home loan may help you get back on your feet. You can consolidate a range of small debts, such as credit cards, overdrafts, car loans, 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 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 Benefits of Refinancing your Home Loan?

There are definitely benefits to refinancing your home loan. These include simplifying your finances by only having to pay back one loan, with lower monthly repayments and lower interest rates.

  • Simplify your finances

  • One loan

  • Lower monthly repayments

  • Lower interest rates

What are the Drawbacks of Refinancing my Home Loan?

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 an exit fee 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 repayment amounts.

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;

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 into your home loan such as:

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

What is the mortgage refinance process?

Sometimes homeowners don’t refinance their mortgage for debt consolidation as they don’t know or understand the process. To help you, here is the process:

Identify why you need to refinance your home loan

You may be refinancing so you can get a better interest rate and monthly repayments, or you might want to consolidate some debts into your home loan, or you may even want to withdraw some of your equity to make home improvements. Make sure you understand the ‘why’ before you start the process.

Consider the costs

Applying for a new home loan may have additional costs such as valuation and application costs. Refinancing with your current lender may enable you to waive the Deferred Establishment Fees (DEF). Understand the costs so you can choose the best option.

Choose your new refinance mortgage plan

Review the different option and home loans available to you to identify one that suits your situation best. Remember to consider the type of loan, the terms, the insurance rate and any required mortgage insurance.

Complete the Application Form

Refinancing your home loan is similar to applying for your initial loan. Complete the application form, either online or on paper. You will need to supply some additional documentation such as updated bank statements, pay slips, and other paperwork relating to your assets, liabilities and income. If you refinance with the same lender, they may be able to retrieve some of this paperwork.

Inform your current lender

Advise your current lender that you are planning to refinance your home loan with a different lender and give approval for them to forward on necessary information to the new lender.

Pre-Approval

The new lender can take anywhere between a few days and a few weeks to review your application and let you know your options. A little patience may be required here.

Property Valuation

Depending on how many homes you are refinancing, your new lender will need to value them all. The first valuation is typically completed free of charge, and additional valuations after that will be completed for a fee.

Finance Approval

Once the lender has completed the review and approval process, they’ll let you know the outcome in writing with a formal loan approval letter. The legal documents will also be created.

Sign-off of legal documents

The final step is to receive and careful review the related legal documents for your new loan. Make sure you understand them before signing as these are legally binding documents.

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 personal financial 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, 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 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.

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.

Debt Negotiators offers you

  • Independent professional advice

  • Support throughout Australia

  • Individual solutions based on your financial situation.

Making Home Loan Refinancing Work

Depending on your circumstances, refinancing your home loan can offer you some helpful opportunities such as changing a variable interest rate to a fixed interest rate to simplify budgeting and money management; releasing equity from your home loan; or extending your mortgage as a way to reduce monthly payments. Some home loans even offer an opportunity to split the balance into two, separating out the home loan amount from the consolidated debt amount (with the same interest rate applied to both). This will help you budget additional payments to reduce the consolidated debt balance faster.

Talk to Us Today

Our team are available throughout the week, no matter where you live in Australia. We’re here to help you identify the best solutions for your current financial situation to help you get out of your financial despair and avoid bankruptcy, whether you have bad credit or not.

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