Are you trapped in home loan matters? With interest rates always in flux, it can be back-breaking to get the most optimal deal when you first put your signature on the dotted line. Now could be the time to look into refinancing your home loan. A new mortgage can help you benefit from lower bank rates, access equity for renovations or other expenses or get future-proofed.

Do your homework to refinance a home loan

Refinancing means swapping one loan for another with better terms. This can include changing debt repayment conditions, minimising the cost of borrowed money or increasing (or decreasing) the overall amount. Your lender fully settles your existing mortgage with the proceeds from your new programme.

If you are sure that you can gain from refinancing a home loan in NZ, research and compare different lenders. Start by looking at what they offer in terms of rates and fees and consider how responsive they are – this all impacts how positive (or negative) your experience will be when setting up a new mortgage.

See if you qualify for refinancing

To promptly determine if you are eligible for a programme, use an online calculator to understand how much money you save with a new home loan. Please note the calculator does not do the maths for secondary factors, such as the discount period and bank fees which may affect your money-lending cost.

Compare options

home loan refinance process is to compare available options. Taking pains and looking at various lenders is essential, as not all can apply to your situation.

While doing research, scrutinise:

• Products – fixed rate, split loan, variable rate, offset mortgages, etc.
• Lenders – banks, credit unions, etc.
• Fees associated with each lender and product
• The length of your money-lending agreement
• Other details, such as repayment holidays or redraw facilities

Before signing documents, research how different mortgage features may impact your financial situation. When refinancing a home loan in NZ before the completion of your original mortgage term, you may be liable for early repayment penalties. The amount of these penalties varies depending on the creditor and debt terms, so be sure to enquire about them before committing to anything.

Too much information to figure out on your own? Talk to an experienced consultant about getting the best deal. They can help you assess your home loan refinance options and guide you through the products.