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Why refinance your home loan with MOVE?

Refinancing your home loan to a lower interest rate could be one of the easiest ways to save money. However, there are plenty of other benefits to reviewing your home loan, including:

  • Consolidating your debts

  • Gaining flexible features that are not available with your current loan

For more helpful information and tips, check out our FAQs or get in touch with one of our experienced lending specialists.

Steps to Refinancing

1. Advertised interest rate vs comparison rate
When it comes to refinancing it’s important to weigh up your potential savings you could make by switching loans, against the costs. So when you’re considering a new loan make sure you look at the comparison rate – rather than the variable rate.

If you compare loans based on the variable interest rate, you’re not taking into account the fees and charges the loan may carry. Instead, look at the comparison rate as a tool to help you identify the true cost of the loan.

For example, A member showed Stephanie a competitor’s offer which seemed like a great deal. However, after carefully reviewing, there were a lot of additional ongoing fees and was going to cost the member a lot more in the long run. Compared to our offer which although had a slightly higher interest rate there were no ongoing costs at all.

2. Find a suitable loan
Interest rates are not the only consideration when you are looking at refinancing. Each loan offers a combination of different features, so you need to make sure the one you choose has the features that are important to you. Some questions to ask when evaluating a loan include:

  • Can you make extra repayments?
  • Does the loan offer an offset facility?
  • Are you allowed to make unlimited redraws – and will you be charged for them?
  • What are the ongoing fees or break fees?

It is an Australian Government requirement for financial institutions to have a Home Loan Key Fact Sheet available for every mortgage product; this is available on the lender’s website.

This is a true ‘non-bias’ look at the facts of the loan product and can make comparing products easier.

3. Assessing your refinancing and costs

While refinancing is a straightforward process, there are some costs you’ll need to consider:

  • Break fees: Consider these fees and weigh them against the savings of refinancing.
  • Valuation fees: In Australia valuation fees can cost $300-600 depending on where you live.
  • Establishment & ongoing fees: Confirm any establishment and ongoing fees to your loan.

Generally, the interest rate savings will outweigh the costs of refinancing the loan.

Meet Tom, he was looking to refinance his two loans, totalling $494,000 from a major bank. Unsatisfied with the service, he was seeking better treatment and to pay off his loans quicker. After finding him a suitable loan to achieve his goals, Stephane worked out the savings.

Over the life of the loan, Tom saved a total of $128,690 or $216.50 per fortnight, giving Tom the ability to pay off his loan 6 years and 3 months earlier!

4. The application process
Applying to refinance your home loan can be a daunting process, but a good lending specialist will be able to guide you through the process as painlessly as possible.

One of the ways you can help the application process run smoothly is to have all your supporting documentation ready when you apply. Documents you may need to supply include:

  • Identification
  • Proof of income such as tax returns, pay slips and dividend statements
  • Documentation on your existing credit facilities and expenses
  • Rates notice

Depending on the complexity of your application, more documents may be required.

5. Settling your new mortgage
Once approved for finance, MOVE Bank will give you contracts to complete and return. They will then contact your current lender to organise the refinance.

When your current lender has received the payment on their loan, MOVE Bank will take possession of your Certificate of Title and the refinancing process is complete.

Refinance to a MOVE Bank home loan

To be eligible for this rate, a credit of $1500 a month must be deposited into a MOVE Bank transaction account. A low rate variable loan designed to offer excellent features.

  • Borrow up to 95% (with LMI)
  • No ongoing monthly or annual fees
  • To be eligible for this rate, a credit of $1500 a month must be deposited into a MOVE Bank transaction account.
  • Owner Occupied <80% LVR 5.94%p.a. Interest rate
  • 5.99%p.a.
    Comparison rate

To be eligible for this rate, a credit of $1500 a month must be deposited into a MOVE Bank transaction account. A fixed rate loan designed to offer excellent features.

  • 1, 2, 3 & 5 year fixed options
  • Borrow up to 95% (with LMI)
  • To be eligible for this rate, a credit of $1500 a month must be deposited into a MOVE Bank transaction account.
  • Owner Occupied 1 Year Fixed 5.89%p.a. Interest rate
  • 5.98%p.a.
    Comparison rate

A variable loan with 100% offset and no ongoing fees.

  • Borrow up to 95% (with LMI)
  • 100% offset account
  • No ongoing monthly or annual fees
  • Owner Occupied <80% LVR 6.14%p.a. Interest rate
  • 6.19%p.a.
    Comparison rate

A fixed rate loan with a 100% offset account.

  • 1, 2, 3 & 5 year fixed options
  • 100% Offset account
  • Owner Occupied 1 Year Fixed 6.09%p.a. Interest rate
  • 6.18%p.a.
    Comparison rate

Product Features:

Home Loans
Minimum Loan Amount : $100,000
Maximum Loan Amount : $3,000,000
Maximum Loan to Valuation Ratio (LVR) : 80% for Principal & Interest or 80% for Interest Only
Maximum LVR with LMI : 95% for Owner-Occupier or 90% for Investment
Maximum Loan Term : 30 years
Interest Type : Variable
Repayment Type : Principal & Interest or Interest Only
Interest Only Available : Yes, Interest Only available for Owner-Occupier construction loans (max 12 months) or Investment loans (max 5 years)
Repayment Frequency : Weekly, Fortnightly or Monthly
Offset Account : No
Additional Repayments Accepted : Yes
Redraw Facility : Yes
Establishment Fee : $600
Annual Package Fee : $0
Discharge Fee : $350
Available for Bridging : No
Split Fee : $50
Available for Construction : Yes

Product Features:

Home Loans
Minimum Loan Amount : $100,000
Maximum Loan Amount : $3,000,000
Maximum Loan to Valuation Ratio (LVR) : 80% for P&I loans or 80% for IO loans
Maximum LVR with LMI : 95% for Owner-Occupied Loans and 90% for Investment
Maximum Loan Term : 30 years
Interest Type : Fixed - 1, 2, 3 and 5 years
Repayment Type : Principal and Interest. Interest Only available for investment loans
Interest Only Available : Yes, Interest Only available for investment loans only
Repayment Frequency : Monthly
Offset Account : No
Additional Repayments Accepted : Yes
Redraw Facility : Yes
Establishment Fee : $600
Annual Package Fee : $0
Rate Lock Option : Yes
Discharge Fee : $350
Available for Bridging : No
Split Fee : $50
Available for Construction : Yes

Product Features:

Home Loans
Minimum Loan Amount : $100,000
Maximum Loan Amount : $3,000,000
Maximum Loan to Valuation Ratio (LVR) : 80% for Principal & Interest or 80% for Interest Only
Maximum LVR with LMI : 95% for Owner-Occupier or 90% for Investment
Maximum Loan Term : 30
Interest Type : Variable
Repayment Type : Principal & Interest or Interest Only
Interest Only Available : Yes, Interest Only available for Owner-Occupier construction loans (max 12 months) or Investment loans (max 5 years)
Repayment Frequency : Weekly, Fortnightly or Monthly
Offset Account : Yes
Additional Repayments Accepted : Yes
Redraw Facility : Yes
Establishment Fee : $600
Discharge Fee : $350
Available for Bridging : No
Split Fee : $50
Available for Construction : Yes

Product Features:

Home Loans
Minimum Loan Amount : $100,000
Maximum Loan Amount : $3,000,000
Maximum Loan to Valuation Ratio (LVR) : 80% for P&I loans or 80% for IO loans
Maximum LVR with LMI : 95% for Owner-Occupied Loans and 90% for Investment
Maximum Loan Term : 30 years
Interest Type : Fixed - 1, 2, 3 and 5 years
Repayment Type : Principal and Interest. Interest Only available for investment loans
Interest Only Available : Yes, Interest Only available for investment loans only
Repayment Frequency : Monthly
Offset Account : Yes
Additional Repayments Accepted : Yes
Redraw Facility : Yes
Establishment Fee : $600
Rate Lock Option : Yes
Discharge Fee : $350
Available for Bridging : No
Split Fee : $50
Available for Construction : No

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Frequently Asked Questions

There are a number of things to look for in a home loan if your primary objective is to save money.

First and foremost, look further than the interest rate. If you compare lenders based on the advertised interest rate, you are not taking into account any fees and charges that the loan may carry. Instead, look at the comparison rate. As the name suggests, a comparison rate is a tool to help you identify the true cost of a loan. It is a rate that includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure.

Home loans will typically have an offset account, redraw facility, or both. A mortgage offset is a transactional or savings account which is linked to your home loan. The money that you put in this account will reduce the amount of interest payable on your mortgage.

For example: If you have a $260,000 home loan with $10,000 in your offset account, you will only be charged interest against $250,000. By building up your savings in your offset account, you can cut years and thousands of dollars off your home loan and is an important feature to have if you are looking at saving money on your home loan.

With a redraw facility, you can make additional repayments to your home loan to reduce your principle loan amount, therefore reducing the amount of interest payable on your mortgage. You can access the funds from your redraw balance, however unlike an offset account, the funds must firstly be transferred to a transactional or savings account before you can use them.

When shopping around for a home loan, be sure to check out and compare the features each home loan offers.

  • Do they offer an offset facility?
  • Do they allow you to make extra repayments?
  • Do they allow you to make unlimited redraws?
  • Do they charge any ongoing fees or early payout fees?

Every lender is different, so it’s important to make sure you’re aware of all the features and possible restrictions on each home loan you’re comparing. It is an Australian Government requirement for all financial institutions to make a Home Loan Key Fact Sheet available for every mortgage product that they offer. This is a true ‘non-bias’ look at the facts of the loan product you are considering. This information should be available on the lender’s website which can make comparing products easier for you.

Home equity is money that you can use to build your wealth. In essence, equity is the difference between your home’s value and the amount owing on your mortgage. For example, if your home is worth $550,000 and you have $325,000 owing on your home loan, the equity you can access is $225,000. You can use this equity to invest in other areas such as home renovations, a new car, shares or investment property.

Yes! However, you will need to consider how much you can borrow first. In a nutshell, your borrowing capacity is determined by your income minus your financial commitments. Your financial commitments include items such as your living expenses, credit cards, car loans or any interest-free arrangements. If you would like an estimate on how much you could borrow, check out our Borrowing Power Calculator.

If you’ve been paying off your mortgage consistently over the past few years, you may be able to use the equity in your existing property to secure an investment property. Ideally, you should have 20 per cent of the investment property’s value as a deposit. If this option appeals to you, be sure to check out our range of Investment Home Loans for more information.

The simple answer- yes, yes you can! Credit card and even personal loan debt are notorious for having a high-interest rate. If you’re looking to refinance your home loan, why not use the opportunity to review your total financial situation? It means that you’ve only got one loan to pay and could mean big savings for you.

When considering your options, it is important to look at the potential disadvantages involved. Remember that your mortgage is a long-term debt, whereas a credit card is usually a short-term debt. This could mean that you are paying more interest in the long term. However, by making extra repayments on your home loan you can ensure you’re making the most of your debt consolidation. Use our budget calculator to see where you might be able to free up cash in your budget for extra mortgage repayments.

If you’ve been planning on renovating your property, why not consider adding the cost of the renovation on to the amount of your home loan refinance? Not only will you be acquiring a home loan that better suits your needs, but you’ll get the chance to complete those renovations you’ve been putting off.

A fixed rate home loan means that you lock in an interest rate for a set period of time (usually 1, 3 or 5 years). At the end of the fixed rate term, the loan will usually change to the standard variable rate offered by the lender. While fixed-rate home loans ensure that fluctuating interest rate rises do not affect you, this also means that rate drops won’t apply to you. Fixed rate home loans can also restrict features such as redraw facilities, extra repayments and break fees often apply.

If you decide not to fix your home loan, your interest rate will move with the changes in market interest rates. This means that your interest rate could rise and fall over the life of your loan, which may affect your repayments. Variable rate home loans are generally more flexible with your repayments, redraw facilities and offset options.

If you’re still unsure about which interest option is best for you, we recommend getting in touch with your lending specialist.

In short, yes. However, the long-term rewards often outweigh the initial investment.

Here are the potential costs you’ll need to consider

  • Break fees: If you are opting out of your existing fixed rate loan contact, there are likely going to be fees associated. You should consider these and weigh them against the long-term savings of refinancing.
  • Valuation fees: When you refinance, you may need to have your property professionally valued in order to ensure that there is sufficient security over the amount being lent. In Australia valuation fees generally, cost $300-600 depending on where you live.
  • Establishment & ongoing fees: Be sure to check out any establishment, and ongoing fees to your new loan. The interest rate savings will generally outweigh the costs of refinancing the loan.

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