Hi Guys,
I'm looking for advice in regards to our mortgage. Going off our original mortgage LVR 2 years ago, we were at roughly 94% LVR. Going off a recent valuation, we would be sitting around 72%. Would it make sense to refinance and does having a better LVR offer lower mortgage interest rates?
Any advice would be greatly appreciated.
Yes true, you might not even have to refinance - just shop around and then threaten kindly request your current lender to beat the rates you find.
Would it make sense to refinance and does having a better LVR offer lower mortgage interest rates?
Yes and yes. Depending on what your rate is currently of course, but more than likely that current interest rates are lower than what you had before (under 2% is not uncommon right now).
Once your LVR drops below 80% you have more options for lenders. If you could muster up a bit more cash to get to 70% LVR for example, Athena will give you 1.94%.
What’s your current rate and loan amount? Lots of good deals around at the moment.
If you do switch, don't opt for a 30 year loan again. If you must take 30 years, opt to pay your current (higher) monthly payments, so your loan accumulates lesser interest over its lifetime.
Find a good mortgage broker (one that doesn't just sway you towards a specific lender for the sake of better commission, for example). Let them know your financial position and financial goals. Refinance every 2 years, take advantage of cashback. Don't just be blinded by low rates. For example, I never knew I could have an investment loan as part of my mortgage which is an advantage for me. It's about finding what's best for your needs rather than what worked for other people or worse being "loyal" to lenders.
You're probably paying a higher rate to cover LMI as your LVR was over 80% when you established the loan. But in saying that, you've left a critical piece of information out of the OP. What is your current interest rate? If it's anything north of 2.2-2.4%, seek to refinance at a lower rate.
Athena Home Loans. They always give existing customers the same interest rate as new to bank customers.
Definitely worth giving your existing bank a call as a starting point. My partner and I were in a similar position last year (started with 95% LVR and went to <80% LVR from the housing price hike), we called our bank and just asked for a better deal or we're gunna go elsewhere and they offered us a significantly lower (fixed) rate over the phone, so we accepted. Didn't have to do any paperwork or pay any fees to have it changed.
Thanks for all your responses. We're currently paying 2.84% variable with St George. I could potentially get another valuation stretching closer to 900k as the valuation for 850k was 4 months ago. Core logic has the house at 990k and RealEstate has an estimate of 893k, so potentially that could scrape the 70%LVR. I'm hopeless with refinancing and understanding the best value for money but I have to pull the finger out as we've twins coming to add to our collection of 2 already. Thank you all for your advice, much appreciated.
2.84% variable is way too high… you should easily be able to get <2.2% elsewhere, plus most lenders give a cashback to help cover the switching costs
Apart from a potential better interest rate, why would you re-finance?
There is no problem asking, if you have the time to get all the info together. Worse case you stay where you are.