Common Mistakes Australians Make When Refinancing

Refinancing a home loan can offer major savings, but it's not without risks. At LTE Loans, we often help clients fix refinancing decisions that didn't quite go as planned.

Here are the most common mistakes Australians make when refinancing and how you can avoid them.

1. Focusing only on interest rates

A lower rate is essential, but it's not everything. Many loans with low advertised rates include high fees or lack flexibility. Look at the comparison rate, which covers most of the costs.

2. Not understanding the fees involved

When you refinance your home, you might face discharge fees, application fees, or break costs if you're on a fixed-rate loan. These can add up – so calculate whether the benefits outweigh the costs.

3. Extending the loan term unnecessarily

Resetting your loan term to 30 years can reduce your repayments, but it might cost you more in interest over time. Striking the right balance between short-term relief and long-term cost is essential.

4. Refinancing without a clear purpose

Don't refinance just because everyone else is. Whether you're consolidating debt, accessing equity, or trying to reduce repayments, always have a clear financial goal.

5. Not using a mortgage broker

The refinancing market is complex. Using refinance mortgage brokers in Melbourne like LTE Loans gives you access to expert advice and competitive loan options from dozens of lenders.

We're here to help you avoid these common pitfalls and find the best refinance home loan for your unique needs.