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Thoughts on refinancing mortgage after 3 years?

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    Coming up in March I will have had my mortgage for 3 years, which will be the end of the honeymoon period of a low interest rate.

    Just wondering thoughts on refinancing? Any risks? Have you done it successfully before? I don’t know a lot about it. Currently with one of the big banks through a broker…

    The lazy me can’t really be bothered lol, but if it keeps the interest rate down, maybe it will be worth it. All the financial advisers suggest it!


    A few factors to consider are

    How much money you owe

    For How Long

    and how much you will save if you can find a cheaper loan

    and how much it will cost to switch loans.

    Will rates go up or down in the future

    I would shop around for that info and maybe tell the bank of your intentions ad see if they come up with a deal to keep you.


    Another thing to consider is if the bank has you “tied in” for a period that’s longer than the honeymoon period. I know my loan has me paying out a lot of money if I try to pay it out or change it within the first 5yrs.


    Some thing else to consider is has your attitude to your mortgage changed since you took it out.

    For instance, did you go with a fixed rate because you were scared about interest rates rising and not being able to make the minimum payments, and now you are in a better position financially and want to pay of as much as you can as quickly as possible (many fixed rate loans have limits on how much extra you can pay off)


    If you are uncertain about your research/money skills, get the broker to work for his money. I prefer not to use them, but many people do and feel more comfortable about it.

    The only thing I would suggest is find a mortgage than will not penalise you for paying it off in a shorter time, or with lump sums. Getting that mortgage paid off asap should be your prime concern. It will give you a hell of a lot of freedom once you do that, not to mention reduce stress and give you the opportunity to downshift workwise down the track if you want/need to.


    I agree with Earthwalker, get your broker to review and give you some options so you can decide whether or not it is worthwhile, without having to invest a lot of time in research yourself. If he’s doing a good job for you, he should be looking in to your options ahead of the current fixed term expiring anyway.


    I appreciate everyone’s feedback and that is exactly what I have done, I think the broker is organising a lower interest rate with the same bank…


    I forgot this: Something you may wish to consider is paying the mortgage weekly or fortnightly (adding a few extra dollars if you can) – this is a very good way of getting ahead, if your loan terms will allow.

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