Don’t rush to refinance your loan! Try refinancing calculator before taking a decision

Refinancing is a great way to lower your monthly expenses, but it’s not always the right decision. If you’re considering refinancing your home loan and looking for some help with the decision-making process, we have underlined how a Refinance Home Loan Calculator can be used for financial decision-making.

You decide to switch lenders and get a much lower interest rate of 8% from another bank.

You decide to switch lenders and get a much lower interest rate of 8% from another bank. The new lender agrees to pay off your existing loan (12%), and you take out a new 30-year loan for AUD 100,000 with an interest rate of 8%.

Experts suggest that loans can be refinanced when interest rates are lower. 

So, what is the right time to break even? Should you opt for the refinancing option today or do it after five years?

• Calculate the breakeven period for a loan:

The breakeven period is calculated by subtracting the interest rate of a new loan from your current interest rate. If your new rate is higher than your current one, it will take longer for you to make up for the difference in rates. On the other hand, if your new interest rate is lower than or equal to your current one, you’ll start saving money immediately after closing on that new deal.

You can use an online refinance home loan calculator to assess whether or not refinance is a good step.

To begin using this calculator, enter a few details about yourself and then select which type of loan you want to look at (fixed vs variable rate). Once this information has been entered into their system, they will give you an estimated APR based on what they have learned from other people who have used their service before. 

Calculate if refinancing your home loan right now makes sense or not!

• Calculate your home loan refinancing breakeven time: Calculate the total time it will take you to recoup the refinancing costs if you sell your property or refinance again. This is called a breakeven time.
• Calculate your home loan refinancing savings: How much can you save on interest rates and fees if you invest in a new loan and meet all the conditions?
• Calculate your home loan refinancing interest rate: What would be your new interest rate? How much would that affect your monthly repayments? 
• Calculate your home loan refinancing early repayment charges: Will there be any fees if you want to sell or buy another property before paying off this mortgage? 

Conclusion

The bottom line is that you can’t rush into a decision like this. Many factors need to be considered before taking any action, and it is essential to consider them before making any decisions. A refinance home loan calculator will help you assess whether or not now is the right time for you to refinance your home loan or not!

There are several options available online that you can take into account. However, it is advised that all the information inputted in the calculator is correct as the long-term financial planning of an individual depends on it. If you do not know how to use a calculator, there is help available on the app and website of banks and financial institutions. In addition, you can also contact their customer support to assist you in using the calculator and making a correct financial decision.