DON’T LET COMMON REFINANCING MISTAKES DRAIN THE SAVINGS OF THE SWITCH!

Refinancing is often touted as a pathway to saving thousands over the life of your mortgage, unlocking equity or securing more suitable features.

Refinancing your home loan can deliver substantial savings and improved flexibility, but only if you avoid some common pitfalls that trip up Australian borrowers every year.

Yet many Australians end up paying more or missing better opportunities by falling into avoidable traps.

Here’s how to make sure your switch delivers real benefits, not hidden costs.

Mistake 1

Not comparing lenders and products

One of the biggest mistakes is failing to shop around. Lenders may offer markedly different rates, deals and features. Even small rate differences can add up to

substantial savings. Don’t just stick with your current lender out of loyalty. Always use our services to scan the market for you.

Mistake 2

Focusing only on interest rates and cashback

Many borrowers zero in on the headline rate or a cashback offer - ignoring the real cost of fees, ongoing charges or sub-par features.

Make sure to check the comparison rate. This incorporates fees as well as interest and consider if short term sweeteners (such as cashbacks) outweigh long term savings.

Mistake 3

Extending the loan term unnecessarily

Obtaining a lower regular repayment might look attractive, but stretching your loan term (for example, resetting a 25 year loan to a new 30 year deal) can actually cost far more in interest over time.

Match your loan term to your true finance goals, not just what looks easiest right now.

Mistake 4

Refinancing too often

With rates changing fast, it’s tempting to refinance repeatedly. But each switch comes with costs:

− application fees

− exit charges or mortgage discharge costs

that can quickly erode any savings.

Weigh up the total cost versus your savings before jumping in.

Mistake 5

Falling for honeymoon rates

Introductory ‘honeymoon’ rates may look impressive but often revert to higher rates that can leave you paying more once the deal period ends.

Read the fine print and always check what the ongoing rate will be after the honeymoon ends.

Mistake 6

Not considering your credit score

Many borrowers are caught out at application time by unknown credit issues. Always check your credit score first so there are no surprises. And space out any loan applications. Multiple hits on your file in a short period can reduce approval odds.

Another reason to use our finance services.

Mistake 7

Underestimating refinancing costs

Don’t miss the true cost of switching. Look out for:

− settlement fees

− break costs (especially on fixed loans)

− property valuation charges and

− lender discharge fees.

Do a thorough cost benefit analysis to ensure the savings are worth the expense.

Mistake 8

Overborrowing on equity

Using refinancing to cash out a large chunk of your home’s equity can be risky, especially if property values fall or your income changes.

Only borrow what you really need and keep future repayment flexibility front of mind.

Mistake 9

Skipping professional advice

Expert advice and a good broker can help to avoid many mistakes.

By steering clear of these common errors, you’ll be well on your way to refinancing with confidence and ensuring your mortgage works harder for your finance future.

If you'd like help with assessing your personal and financial situation, as well as comparing the loans in the market to see if you're truly getting the right deal for you, then call Bob Malpass now on 0431 862 136, email bob@westhomeloans.com.au