10 Smart Reasons to Refinance That Go Beyond the Interest Rate

When most people think about refinancing, they think of one thing: a lower interest rate. But according to Eva Loisance, expert mortgage broker at Finni Mortgages, there’s far more to gain from refinancing than just shaving a few basis points off your repayments.

Speaking on the Smart Property Investment podcast, Eva broke down 10 compelling reasons property owners and investors are choosing to refinance even when rates are already competitive.

1. Unlocking a Higher Property Valuation
Different lenders value the same property in vastly different ways. Some might use desktop valuations, others send someone onsite and the difference can be as much as 10 to 20%. A higher valuation can mean a lower LVR, access to better products and the ability to release equity without paying lenders mortgage insurance LMI.

2. Consolidating Bad Debt
Many borrowers carry high interest debts like credit cards, personal loans and car loans. Refinancing can consolidate these into your home loan at a much lower rate, dramatically reducing monthly repayments and clearing the way for future investments.

3. Releasing Equity for Investment
If your property has increased in value, refinancing can help you access that equity to fund a deposit on another property. This can be a faster route to growing your portfolio than waiting to save cash.

4. Accessing Better Lending Policies
Not all lenders are created equal. Life happens, from career changes to self-employment or parental leave and your current lender’s policy may not suit your evolving situation. Refinancing gives you access to lenders with policies better aligned to your goals.

5. Boosting Borrowing Capacity
Resetting the loan term back to 30 years can improve borrowing capacity. This gives borrowers a longer runway to repay the loan, lowering monthly commitments and increasing serviceability.

6. Resetting the Interest Only Period
For investors looking to optimise cash flow, resetting the interest only term can be a smart move. This allows them to keep monthly repayments lower, redirecting cash into other strategic investments or paying down their own home.

7. Improving Features and Services
Some lenders offer multiple offset accounts, better banking apps or redraw facilities. These features can help manage finances more efficiently. A smooth banking experience might seem small, but it matters in the long run.

8. Better Options for the Self Employed
Many self-employed borrowers assume they can’t refinance without two years of tax returns. That’s no longer true. More lenders are accepting alternative documentation like bank statements or single year NOAs. It’s all about finding the right match.

9. Aligning Strategy with Your Broker, Accountant and Advisor
Eva stresses the importance of having your broker, buyer’s agent and accountant on the same page. If your accountant is focused purely on tax minimisation, it can reduce your borrowing power. A refinancing conversation is often where strategy alignment starts.

10. Making a Change When You're Unhappy
Sometimes, the relationship with a lender just doesn’t work anymore. Maybe it’s a poor service experience, lack of flexibility or outdated policies. Whatever the reason, refinancing can be a reset and a strategic move.

At the end of the day, Eva reminds us that a sharp rate alone doesn’t make for a great loan. “Our clients care about flexibility, features, and strategy. There’s always something better out there if you know what to look for and that’s what a good broker helps with.”

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