How to refinance your home loan in lockdown

As COVID-related restrictions continue to shift across the country, many Aussies may find themselves thinking about their homes and their mortgages. With record-low home loan rates on offer right now, homeowners may be wondering how they can refinance while stuck at home.

Don’t let lockdown make you feel locked into your home loan. It is possible to refinance your home loan without ever stepping into a branch.

How to refinance your home loan online

Traditionally, if you wanted to switch financial products you would need to physically go into a branch to do so. Thankfully, technology has advanced so far that many home loan lenders, Reduce Home Loans included, are entirely based online.

In fact, you can complete the process of refinancing your home loan from start to finish entirely from the comfort of your home. As long as you have a smartphone or can get online – and you meet any lender mortgage qualifications – you may be able to refinance.

There are 5 key steps to applying to refinance your home loan online:

 1. Figure out what you want in a new loan

Firstly, you’ll want to take stock of what exactly you’re looking for in a new home loan and lender. Perhaps you want to take advantage of the current low-rate environment and refinance for a lower interest rate? Maybe your annual fee is eating into your budget and you’re conscious of extra costs during lockdown? Or maybe you applied for a more basic loan to begin with and now want to add features, like an offset account? Take time to think this over carefully, and find a copy of your last home loan statement if you don’t know your current rate.

 

 2. Check your financial situation

Next, you’ll want to ensure you’re in the best position to apply for home loan refinancing. Just because you were approved for a loan once, doesn’t mean you’ll gain automatic approval next time. You may want to request a copy of your credit report from the websites of the major reporting bureaus, Equifax, Illion or Experian. There are also apps from companies such as Clear Score (which uses Experian data) who make it very accessible and easy to track changes to your credit score.

If your finances have changed, such as taking on more debt or a drop in your credit score, or if you’ve recently lost income, it may be worth holding off. Work on improving your financial situation so you’re presenting yourself as an ideal borrower and avoiding risk of loan rejection.

 

 3. Research your options

Once you know why you’re refinancing and you’re in good financial health, it’s time to begin your research. As you’ll be refinancing during lockdown or amidst Covid-related restrictions, choosing a lender that offers an online application process is key. Comparison websites may come in handy here to find and compare online-friendly lenders, or you may already be considering refinancing with Reduce Home Loans.

Calculators can also come in handy when making your final home loan decision. Use the Reduce Home Loans Mortgage Repayment Calculator to see how much your new repayments may be with a new home loan. This can help to narrow down a shortlist of new loan options, or confirm that one is a better fit for your budget.

If you’re still not sure which lender to go with, many provide customer service support in a range of lockdown-friendly ways. This includes calling a helpline, filling in a customer service form online, speaking to an online assistant and much more. Reduce Home Loans’ online team is available to answer your questions 24/7.

 

 4. Gather your documents

You’ve chosen your new home loan lender you want to refinance with, now you need to get your online application ready. The application generally will require proof of identification, proof of income (pay slips, tax returns) and your current expenses and liabilities. Downloading a document scanning app to your phone can come in handy in uploading personal information, as not every household has a printer/scanner.

 

 5. Complete your application

You’ve completed all your online research, chosen your next home loan provider and uploaded your documents, now all that’s left to do is submit your application. Again, most home loan lenders nowadays will allow you to apply online.

You may even find that online home loan applications have a faster approval process, as technology is in place to quickly scan and process your documents. This may put you at an advantage applying to refinance online during lockdown than if you had waited to go in branch.

Is now the right time to refinance?

You may be considering refinancing but not sure if you’ll be approved during a lockdown. Keep in mind that unless your personal financial situation has changed, such as a job loss or decrease in income, if you fit the eligibility criteria of a lender you may be approved.

Further, interest rates are currently at a record-low point thanks to the Reserve Bank of Australia (RBA) keeping the cash rate at 0.10 per cent. No one can predict the bottom of the market, and RBA Governor Philip Lowe has stated they don’t expect rates to lift again until 2024. But they may not stay this low forever, with some lenders already lifting rates back above 2 per cent. And as they say, there’s no time like the present.

Reduce Home Loans is currently offering refinancers one of the lowest interest rates on the market at 1.77 per cent with the Super Saver 60 Home Loan. If you’ve built up equity over the years and have an LVR of 60 per cent or less, you may qualify for this competitive home loan.

For more information or to speak to someone about your refinancing options, reach out to our friendly Personal Finance Managers.

(29)    For the Rate Cutter Variable where the borrower pays $1170 upfront fees then a corresponding loyalty discount of 0.10% p.a. off the Rate Cutter Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(27)    For the Investor Rate Slasher Cash Back Variable where the borrower pays $0 upfront fees then a corresponding loyalty discount of 0.06% p.a. off the Investor Rate Slasher Cash Back Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(26)    For the Low Rider Cash Back Variable where the borrower pays $0 upfront fees then a corresponding loyalty discount of 0.06% p.a. off the Low Rider Cash Back Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(25)    For the Economizer Cash Back Variable where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.08% p.a. off the Economizer Cash Back Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(24)    For the Super Saver Cash Back Variable where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.10% p.a. off the Super Saver Cash Back Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(23)    For the Super Saver Variable where the borrower pays an upfront fee of $1170 then a corresponding loyalty discount of 0.15% p.a. off the Super Saver Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(22)    For the Economizer Variable where the borrower pays an upfront fee of $1,170 then a corresponding loyalty discount of 0.11% p.a. off the Economizer Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(21)    For the Investor Cash Back Hero Variable where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.08% p.a. off the Cash Back Hero Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(18)    For the Home Owners Dream 1 year fixed where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.20% p.a. off the Home Owners Dream reverted variable rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(20)    For the Cash Back Hero Variable where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.08% p.a. off the Cash Back Hero Variable (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(14)   For the Investor Rate Slasher where the borrower pays an upfront fee of $1,170 then a corresponding loyalty discount of 0.09% p.a. off the Investor Rate Slasher rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(12)   For the Investor Rate Lovers Interest Only where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.07% p.a. off the Investor Rate Lovers Interest Only rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(11)   For the Wealth Maximizer 3 year fixed Principal & Interest where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.20% p.a. off the Wealth Maximizer reverted variable rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(10)    For the Wealth Maximizer 2 year fixed where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.20% p.a. off the Wealth Maximizer reverted variable rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(9)    For the Home Owners Dream 3 year fixed where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.20% p.a. off the Home Owners Dream reverted variable rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(8)    For the Home Owners Dream 2 year fixed where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.20% p.a. off the Home Owners Dream reverted variable rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(7)    For the Investor Rate Slasher where the borrower pays an upfront fee of $1,170 then a corresponding loyalty discount of 0.09% p.a. off the Investor Rate Slasher rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(6)    For the Investor Rate Buster Variable where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.08% p.a. off the Investor Rate Buster Variable rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(5)    For the Rate Buster Variable where the borrower pays an upfront fee of $150 then a corresponding loyalty discount of 0.05% p.a. off the Rate Buster Variable rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(4)For the Rate Slasher Variable where the borrower pays an upfront fee of $1,170 then a corresponding loyalty discount of 0.08% p.a. off the Rate Slasher Variable rate (at that time) will automatically apply after the 5th anniversary of the loan. These fees and loyalty discount are factored into the comparison rate. The loan setup fees are not refundable.

(3) For the Investor Rate Lovers Variable where the borrower pays $0 upfront fees then a corresponding loyalty discount of 0.06% p.a. off the Investor Rate Lovers Variable rate (at that time) will automatically apply after the 5th anniversary of the loan. These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(2)For the Rate Lovers Variable where the borrower pays $0 upfront fees then a corresponding loyalty discount of 0.06% p.a. off the Rate Lovers Variable rate (at that time)  will automatically apply after the 5th anniversary of the loan.  These fees and loyalty discount are factored into the comparison rate.  The loan setup fees are not refundable.

(1) For the Low Rider Variable where the borrower pays $0 upfront fees then a corresponding loyalty discount of 0.06% p.a. off the Low Rider Variable rate (at that time) will automatically apply after the 5th anniversary of the loan. These fees and loyalty discount are factored into the comparison rate. The loan setup fees are not refundable.

(28) For the Rate Crusher 1 Year Fixed where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.05% p.a. off the Rate Crusher reverted variable rate (at that time) will automatically apply after the 5th anniversary of the loan. These fees and loyalty discount are factored into the comparison rate. The loan setup fees are not refundable.

(19) For the 1 Year Fixed Wealth Maximizer where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.20% p.a. off the 1 Year Fixed Wealth Maximizer reverted variable rate (at that time) will automatically apply after the 5th anniversary of the loan. These fees and loyalty discount are factored into the comparison rate. The loan setup fees are not refundable.