Tips to get the most out of your mortgage refinancing
Although there are some upfront financing costs, you need to take a long - term view. The upfront costs could easily be outweighed by the possibly thousands of dollars you'll save in interest and fees over the life of the mortgage.
Make sure the lower interest rate being offered is for the life of the mortgage and not just a honeymoon rate that reverts to a higher than normal rate after a certain period.
Compare all the costs of any new mortgage, not just the headline rates, because all mortgages have different amounts of application fees, ongoing fees and exit fees. Compare the features too - some are handy but don't end up paying for features you will not use.
Using comparison rates to compare different mortgages can help because the comparison rate will take into consideration other costs associated with the mortgage such as regular fees and not just the interest rate. The comparison rate also takes into account what the mortgage reverts to if there is a honeymoon rate or a Fixed Rate Mortgage.
Make sure you can make additional repayments to your mortgage.
Avoid sending mortgage applications to lots of lenders in hope that one will say yes. This can reduce your credit worthiness. Choose a lender that meets your needs and contact them to discuss further.
In working out your loan affordability, factor in potential further rate increases so that you are prepared for increases to your minimum repayment amount in the future.