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Why use a mortgage broker to refinance?

Do you remember dial-up internet access? How about audio cassettes? Don’t worry if you don’t; they are, of course, a thing of the past.

A 30-year mortgage with one lender is a bit the same – a thing of the past and something that is largely obsolete nowadays, especially given the current climate.

Common reasons to refinance

  • Secure a more competitive interest rate

  • Make the most of possible interest-saving features like offset accounts or redraw facilities

  • Access equity for renovations, additional properties or other financial goals

  • Consolidate debt.

With the cost of living going through the roof and home loan interest rates shooting up from a record low of 0.1 since last May, more and more people are refinancing their mortgages – 2,370 every working day in Australia, to be precise.

Homeowners have experienced the fastest tightening cycle in a generation, and many are ditching their current lender for a more competitive mortgage elsewhere.

Analysis from the Australian Banking Association (ABA) found 70 per cent of bank customers who refinanced their mortgage in the past six months did so with another lender.

If, like them, you feel it’s time to shop around, here’s why you should use a mortgage broker to refinance.

Expertise you can trust

At the moment there is intense competition in the home loan industry. Banks are hungry for your business and are offering all sorts of sweeteners to get you on board. Cashback offers. Rate discounts. Package deals. The whole shebang.

So, how do you know which home loan is most suited for you?

That’s where you need a professional on your team. A mortgage broker is a trained finance specialist. They know the system and which products best suit your needs.

They are also across all the latest industry developments, so you gain access to a wealth of knowledge by working with them.

Tailored finance solutions

There’s no one-size-fits-all mortgage. Everyone’s financial situation and goals are different, which is why you need tailored finance solutions.

A mortgage broker will find a loan that’s appropriate for your specific needs. If they think you could benefit from loan features like an offset account or redraw facility, they'll explain why. But they must work in your best interests and won’t push any extras on you that you don’t actually need.

Options, options and more options

If you go directly to your current lender asking for a more competitive rate, you only get what they are able to offer i.e. their loan products and the rates they are prepared to put on the table.

A mortgage broker, on the other hand, has access to the full smorgasbord – a panel of lenders with different types of products, features and benefits.

What about commissions? The commissions they receive are pretty similar across lenders. This ensures there’s no incentive for a broker to recommend one over another. Their role and obligation is to act in your best interests.

Make your life easier

Trying to understand all the different home loan products out there can be stressful and overwhelming. With a mortgage broker, they can take the burden out of refinancing.

They can also liaise with your chosen lender and facilitate the whole process.

Prepare for the fixed-rate cliff

One-fifth of Australian home loans will revert from fixed to variable in 2023. Do you fall into this category?

If you do, it’s worth speaking to a mortgage broker about your refinancing options. Your current lender’s variable rate may not be the most competitive or appropriate for your circumstances, so it’s important to get a second opinion.

Clients of Collins Hume are eligible for an obligation-free finance appraisal. Contact our team on 02 6686 3000 to find out more.

General Advice Warning

The information provided is general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.


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