Refinancing: Unlock the power of your home loan

There is no set timeframe you need to wait until you can refinance your home loan, however you should consider the following when evaluating if it’s the right time to refinance your loan: 

        Why do you want to refinance? Is there a product you’ve seen that you think might better suit your situation, or have interest rates drastically changed? 

        Has your financial situation changed? 

        What fees might you need to outlay to refinance, and do they outweigh the benefits?  

        Read the terms of your current loans carefully (including break fees, interest rates, comparison rates etc.) and weigh these up against the features of any refinance options you’re considering, including the loan term. Will your objectives be met?

Lots of things can impact your credit score, including when a credit provider obtains a copy of your report during your credit application. Whilst each of the Australian credit reporting bodies calculate credit scores differently, making multiple applications within a short space of time can negatively affect your credit score. Find out more in our quick guide to understanding your credit report.

If you have a below-average credit score, then refinancing could still be an option for you. However, you may need to look to alternative lenders that take a holistic view of your financial situation.  

It’s important to understand what factors have impacted your credit score in the past and ensure that you have a plan in-place to rectify these issues. Check out our tips on understanding your credit score.

Compare the terms and conditions of each product – the one you have, compared to the one you’re considering refinancing to. Ensure you understand the fees and charges to both discharge and get a new mortgage, as they differ from lender to lender and product to product. It’s important to also understand the terms and conditions, including any fees, applicable where you’re considering refinancing with your current lender to a different product. Before making any decisions, read the fine print to ensure your refinancing benefit isn’t eaten up by fees.

Refinancing your home loan is the process of getting a new loan to replace an existing mortgage – this could be with the same lender through moving to a new product, or switching to a new mortgage with a different lender. While some may refinance their home loan to take advantage of a lower interest rate, others do so to consolidate their debts. Refinancing could also help you access any equity built up in a property.

Find out more in our Simple Guide to Refinancing.

To apply for a home loan, you’ll need to provide documents to verify your identity, employment, and financial position. 

To prove your identity:

• Australian passport

or

• International passport showing a valid Australian permanent residency visa

To prove your deposit:

• Recent bank statements, showing a savings balance

• Recent share trading statement, showing current value

To prove your income:

For PAYG applicants you’ll need two recent payslips plus one of the following: 

• Most recent group certificate  
• Most recent notice of assessment  
• Current letter of employment 
• Bank statements - showing last 3 months’ salary 

For Self-Employed applicants, the required documents vary depending on how long you’ve been self-employed.

At least six months:

You’ll need to be able to show at least six months of GST and ABN registration and provide an declaration of financial position, as well as one of the following:6 months business bank statements, 6 months BAS-Pepper Money accountant’s letter (not accepted if ABN registered for < 12 months, on loan sizes > $1.5m or on Plus).

Over a year:

1 years’ tax returns and 1 years’ notice of assessments, or

1 years’ financial statements from a registered tax agent or accountant; and

 last month of business bank statements

When refinancing your home loan with us, we can finance up to 90% of the property’s value. This means you’ll need to maintain at least 10% equity or contribute an equivalent deposit to your loan.

Remember, there can be extra costs involved when buying a house. You’ll need to cover government and legal fees, which can’t be added to your home loan balance.

The interest rate offered, and fees and charges will depend on our assessment of a number of factors at the time of application including:

• The size of your deposit
• Nature of the security property
• Loan to value ratio (LVR)
• Your income
• Credit history
• Any assets you own
• Any liabilities or credit obligations
• Chosen repayment type – paying off interest-only, or principal and interest
• The purpose of the loan – if it’s for an owner-occupier or investment property

To get an indicative interest rate speak you can start by using our online borrowing power calculator, or speak to one of our Lending Specialists on 137 377.

You can consolidate a number of debts into your home loan – so long as the consolidation puts you in a better financial position. We can look to consolidate different types of debt into your new home loan, including credit cards, personal loans, car loans, private finance, tax and other personal or business debts. Before you get carried away consolidating all outstanding debts into your loan, check your product features and limits – as some competitive interest rate products may have limits on the number of debts that can be consolidated.