Recent data released by HashChing revealed the most ripped off Australian suburbs where borrowers are paying interest rates as high as 7% or more on their home loans.

With the national average current home loan rate around 4%, is it time to revisit your home loan? 

Do you know that a $300,000 home loan with a term of 30 years and an interest rate of 5.65% p.a. refinanced at a rate of 4.60% p.a. can save you $229.43 per month and up to $82,592.87 over the duration of the entire term! Check out our mortgage repayment calculator to work out your savings!


Like any other financial decision, the decision to refinance your home loan must be based on proper research and numbers. Don’t shy away from crunching the numbers to ascertain whether refinancing your home loan is the right move for you or not.

Here are 3 refinancing secrets to know before you take the plunge: 

1. It is not free – Like every good thing in life, refinancing your home loan is also not free. There are several costs such as lender’s fee, exit fee, the cost of setting up the loan, duties and taxes that will need to be paid when you refinance your home loan. It can cost you up to 5% of your total loan amount to refinance – So if you are refinancing a loan of $200,000, it can cost you anything between $5,000-$10,000 to set up the new loan.

2. Savings vs. CostRefinancing your home loan is a good decision if the savings on your home loan make good the refinancing costs in a year or so. While the decision to refinance also hinges on the reasons why you want to refinance – purely for a lower interest rate or more flexibility in your home loan or simply better customer service, it is still important to check whether refinancing will actually save you money or not.

In the above example, a saving of $229.43 each month means it’d take between 21 months to 43 months to make up the cost of refinancing your home loan. While the former looks like a great deal, the latter is a matter of discussion. If you are planning to hold the property for long, it might still be a good deal to go for.

3. Turning the clock, backward – Refinancing your home loan, while affecting significant savings, will also take your home loan dynamics to the start. When you take a home loan, the initial repayments are applied more towards paying off the interest on your home loan than paying down the principle. Few years into the home loan, a substantial part of your repayment is applied towards paying off your actual principle amount.


However, when you refinance, the clock will turn backward and you will be servicing more of the interest than the principle, again, for few months. Check how long will it take you to pay off your new home loan compared to the existing one. Are you ready to stay indebted for longer? Whether you are searching for a fresh home loan or planning to refinance, shopping around for your home loan on HashChing can boost your savings significantly. Compare home loans now to get the lowest interest rates in the market. Meanwhile, we tell you few tips to pay off your debt, faster!


By Vidhu Bajaj


HashChing is helping Australians by providing access to pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

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