Refinance Home Loan: What is it and How to Apply for it?

Are you looking to refinance home loan, but don’t know how and when to apply for it? If your answer is yes, then you are on the right page. In this blog, you will come to know about refinancing, how you can apply for it and when you should go for it. If you want to save money or want to consolidate other debts, then opting for refinancing would be the best option.

What is Refinance Home Loan?

Home loan refinancing is the method of replacing the current home loan with another. Some borrowers opt for the refinancing option to get benefits like lower interest rates, access to home equity, additional features, or consolidated debt requirements.

Why would you do it?

Some reasons are responsible to consider refinancing:

  • To get lower interest rates, or to access new features like flexible repayments, an offset account or redraw facilities.
  • Accessing the equity in your home to invest, travel, or renovate.
  • If it is an end of a fixed rate term, and you want an appropriate interest rate or flexible home loan.
  • Consolidate debts such as a car loan, personal loan, or credit card into your mortgage, it would be the best option to manage your finances.

Some borrowers like to refinance and switch to a different loan type. For example, you may switch from a variable rate with your existing bank to a new lender with a fixed-rate loan. Or, you may want to refinance into a split loan, where a portion of your loan is fixed rate and the rest is variable.

When to Refinance a Home Loan?

Homeowners who want to opt for refinancing their home loan generally come under four main categories: they are likely to refinance for a lower mortgage rate, for cash out, for a shorter mortgage term, and debt consolidation. You may have one goal or a combination of all four. If you know the reason behind refinancing, then it will help you decide when you want to refinance your home loan. Apart from this, opting for the refinancing option will depend on your financial and personal situation.

How to Refinance a Home Loan?

  • Determine your current situation

Firstly, you should have a clear idea of why are you refinancing and what about your existing home loan. Maybe you want more flexibility or a lower interest rate. You need to check your current home loan and check:

  1. How much time is left to complete repayment of your loan
  2. Whether your loan is variable, fixed, or a combination
  3. How long has it been since you talked to your current lender
  4. Your future plans, both long-term and short term
  5. Your existing interest rate

Despite this, make sure to check what you like or dislike about your current home loan. You need to have a clear understanding of what you expect from your current home loan and whether it is giving you or not.

  • Compare Home Loans Plans

Now, you have an idea of what you have and what you expect, so you need to do some research to know about the availability of home loans. Consider the following points:

  1. Fees: Some home loans come with a low-interest rate, but they have a high annual fee. It might be possible that there will be upfront costs included in moving to a new lender.
  2. Flexibility: How much flexibility do you want? Would you like to make extra repayments? Is the home loan variable or fixed and which is the right option for you?
  3. Features: Ensure home loan refinance broker Sydney offers you all features of your existing home loan or features that are important to you.

You need to check out whether a new home loan offers you better features as compared to your current home loan, if yes, then you can move further.

  • Speak to a Specialist

Make sure to speak to a good home loan lender, and the specialists must be able to answer the following questions:

  1. What interest rates are there for their home loans?
  2. What steps need to be followed to get a new loan?
  3. Which home loan has more benefits?
  4. How does their home application procedure work?

You can also speak to Star Homeloans to get the best advice regarding how to refinance a home loan.

  • Apply for a Refinancing Home Loan

After choosing your new loan, now, you can proceed further with your application. You can apply online or contact a mortgage broker, and you need to provide:

  1. Property information
  2. Personal details including your possible future circumstances
  3. Financial information, including living expenses, income, and debt

If you have prepared documents for this process, then they will help this process to run effectively.

  • Sign Your Refinance Home Loan Contract

After approval of a new home loan, the new lender will send you:

  1. A letter of offer for your home loan
  2. For repayments, a direct debit form
  3. A mortgage form to grant your lender security over your home when you pay back your loan
  4. A notification form for quitting your present lender


Now, you have an idea of what exactly refinance is, when to refinance a home loan and how to apply for it. If you are interested in refinancing, then you can also contact Home Star Home Loan.

Other useful Links:
1) First Home Owners Grant Melbourne
2) First Home Buyer Home Loans Sydney
3) Personal Loan Finance Broker Sydney

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