Interest Rate Trends
For the most part, your decision on whether to refinance your home loan will depend on whether you can secure a better interest rate than the one you’ve got. One way to figure this out is to constantly check the rates that are available on the open market – but if you want, you can get a bit more sophisticated than that.
You can evaluate your refinancing decision by looking at the large-scale economic trends that dictate interest rates.
To dig a level deeper, you can evaluate your refinancing decision by looking at the large-scale economic trends that dictate interest rates. For example, factors such as the rate of inflation and the unemployment rate are usually major contributors to any interest rate changes. When you have a good eye for the economy at large, you can stay one step ahead of the game, anticipating when it might be a good time to refinance.
Keeping an eye on inflation
What kind of home loan interest rates can you find in Australia? This will be mostly dependent on inflation. When the value of the dollar is shrinking fast, rates may rise to compensate for that.
We may currently be at such an inflection point. The Guardian reported in April that the annual rate of inflation crept above 2 per cent in 2017 for the first time in a while; generally, such an increase brings interest rate hikes with it.
For now, officials at the Reserve Bank say they are holding off on raising the cash rate, but they emphasise that the housing market deserves “careful monitoring over coming months.” It might not be long before rates go up – meaning if you’re considering a refinance, it might be wise to pounce now before it’s too late.
Considering other reasons to refinance
Then again, getting a better interest rate isn’t the only possible reason you can have for refinancing your home loan. You also might make such a move because you want to switch between variable and fixed rates, or because you have debts to consolidate. There are a lot of factors that might influence your decision, and you may need to find a mortgage broker who can help you weigh the pros and cons of refinancing.
With us, you can always get help when you need it. We have access to over 40 Australian lenders, and when you’re considering making a change to your loan portfolio, we’ll find you the right financial option for you. Contact the team at Premium Portfolio Finance and we’ll help you evaluate your options and choose a financial option right for you.
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