A Mortgage Shouldn’t Be Set-and-Forget: A Smart Guide to Refinancing

Start with strategy. Refinancing without a clear objective is like heading on a road trip with no destination. Ask yourself: What am I trying to achieve?
Are you looking to reduce financial pressure? Pay off your loan sooner? Fund a renovation? Knowing your “why” will guide the “how.”

If the cost of living is putting a strain on your finances, refinancing to a lower rate or extending your loan term could reduce your monthly repayments. Just remember, a longer term may mean more interest paid over time—so weigh the short-term relief against long-term cost.

Interest rates can shift dramatically over the life of a mortgage. If your current rate is above the market average, refinancing to a more competitive rate can lead to serious savings—sometimes tens of thousands of dollars over the life of the loan.

Want to be mortgage-free sooner? Refinancing to a shorter term—say from 30 years to 20—might slightly increase your monthly repayments but reduce the total interest paid. It’s a smart move if you can afford the higher repayments.

If your property has increased in value, you may be able to tap into that equity to fund renovations, invest, or consolidate debts. This can be a cost-effective alternative to personal loans or credit cards, but make sure you’re comfortable taking on a larger loan amount.

Lenders are competitive—and many are offering cashbacks or incentives to win your business. These offers can help offset the costs of refinancing. Just be sure to read the fine print and compare more than just the headline offer—look at the interest rate, fees, and flexibility of the loan.

AAP Finance Brokers work with over 60 Lenders, so there is always some deals on the table we can offer if a cashback would be beneficial for your circumstances.

If you’re juggling multiple debts—like credit cards, personal loans, or car finance—rolling them into your home loan could reduce your interest rate and simplify your repayments. But remember: home loans are longer term, so the total interest paid could be higher unless you actively pay down the debt faster.

When the market moves, so should your strategy. If rates have dropped since you first took out your loan, refinancing could mean instant savings. Even a 0.25% drop can make a big difference over time.

With the market recently seeing one interest rate drop this year and more likely – it’s the perfect time to be considering if refinancing is worth it for you.