Does refinancing your home loan really save you money?



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May 29, 2011

Does refinancing your home loan really save you money? According a 2010 Mortgage Choice survey, the answer is yes.

If you’re thinking of mortgage refinancing but aren’t quite sure if it’s worth it, it may be helpful to consider the results of the survey, which asked 1208 respondents about their refinancing experience:

  • 68 percent said their interest rate decreased
  • 23 percent were saving $300 or more per month on their repayments
  • 88 percent were paying $50 less per month
  • Main reason for refinancing: to get a better deal – 24 percent; debt consolidation – 11 percent
  • 42 percent reduced their interest rate by one percentage point or more
  • 46 percent avoided paying exit fees when they refinanced
  • 22 percent paid up to $500 in exit fees, 10 percent paid $500-$1000 and 5 percent paid over $5000
  • 54 percent changed both lender and loan product (78 percent in this group reported a cheaper interest rate upon doing so)
  • 46 percent changed loan product only (56 percent achieved a lower interest rate)
  • 83 percent refinanced with a bank, eight percent with a non-bank, and six percent with a credit union
  • 32 percent of men surveyed regretted not refinancing sooner
  • 89 percent of respondents had no regrets about refinancing
  • 86 percent found the refinancing process relatively stress free
  • Generation Y (those born between 1980 and 1994) were the most likely to refinance

If you’re considering taking the leap, compare home loan interest rates online. Or use a refinancing calculator to help you navigate the mortgage market labyrinth from the comfort of your lounge room.

 

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