Refinancing your home loan to take advantage of new features like a lower interest rate could save you money. But, before you switch, make sure that the benefits you receive outweigh the costs of refinancing.
Familiarising yourself with the refinancing process and how much you can expect it to cost can make the journey much easier and more worthwhile.
When comparing home loans with a view to refinance, one of the most important factors to consider is the cost involved. When you pay out your current mortgage with a new loan you could incur a number of upfront and ongoing costs. These costs will vary depending on your existing (and future) loan and lender and may include:
Other legal, mortgage registration, and settlement costs may also arise when you refinance. This is why it's important to always check with your lender or an HSBC home loan specialist to find out what costs might be involved before you sign on the dotted line.
True, there are some fees associated with refinancing, but there are also a number of cost savings you can benefit from as well. For example, your new loan could:
Plus, many lenders will waive establishment and application fees when you make the switch.
That will depend on your situation. Once you've made a shortlist of home loans that suit your new situation, you need to figure out all the costs involved. This will give you an idea of how much you stand to save – or pay. Working out how long it will take you to recover the costs of refinancing is another great way to know if it's right for you.
You can use our repayment calculator to find out if refinancing would save you money. The calculator also considers any fees we charge upfront or ongoing.