If you are, then it might be time to consider refinancing your home loan. With official cash rates now at an all time low, now would be as good a time as any to review your home loan needs, even if its just to make sure it is still helping you achieve your financial goals. In simplest terms, refinancing involves paying out your current loan and substituting it with a new loan. Changes may include shortening your loan term, adjusting repayments on your loan, so you can own your home sooner; or taking out a loan with added features such as an off-set account or redraw facilities.

Why should I think about refinancing?

A good way to think about refinancing is as a tool to get you from point A to point B. Point A is your existing mortgage that offers limited flexibility and may be sitting at a higher interest rate. Point B is a flexible home loan at a more competitive rate that will help you achieve your financial goals earlier.

There are a range of reasons to consider refinancing, including:-

- Take advantage of low interest rates.

- Look at some new features such as flexible repayments, redraw facilities and account splitting.

- Tap into the equity in your home to renovate or purchase an investment property.

- Change the loan term and pay the new loan down sooner.

- Debt consolidation.

How much will it cost to refinance?

In most cases, refinancing your home loan can save you lots of money, but it does depend on your current home loan terms and conditions. There may be some upfront costs you need to budget for, so it is always best to talk these through with your mortgage broker in advance. These costs are usually short term and are quickly out weighed by the medium to long term benefits of refinancing. Some of these costs may include, settlement fee, loan establishment fee and exit fees and charges.

To give you an idea of what to expect, here is an outline of the fees associated with the Collins Plus+ Home Loan, a current product available with Collins Home Loans.

Exit fees (from your current loan) - depending on how long you have had your current mortgage for, there may be some exit fees to pay for discharging the loan before term. Generally, the longer you've had the loan, the less the exit fees will be. Your mortgage broker can advise you of these, once they have reviewed your current circumstances.

Annual fee - none

Establishment fee - none

Off-set account fee - none

Settlement fee (payable at settlement)-  $300

Valuation fee - $250

Collins Home Loans' new product, Collins Plus+ offers a 3.99% variable rate (4.01% comparison rate). This is a fully featured home loan that offers Principal and Interest as well as Interest-only terms, up to five years. Click here to find out more.

Or take the Home Loan Comparison Challenge to review your current circumstances and compare your home loan.

Please feel free to contact our Finance Manager, Ian Smith on finance@collinshomeloans.com.au or on tel. 1800 265 5467 for an obligation-free loan review or quote.