Top tips to refinance from fixed to variable rates

If your fixed rate period ending is approaching, you might be wondering about your options. Many Bulimba homeowners are exploring refinancing to switch from fixed to variable interest rates, and there are compelling reasons to consider this move.

Understanding the switch from fixed to variable rates

When your fixed interest rate term concludes, your loan typically reverts to your lender's standard variable rate. This might not be the most suitable option for your current financial situation. Refinancing allows you to take control and potentially access a lower interest rate while gaining flexibility in your loan structure.

Variable interest rates fluctuate with market conditions, which means your repayments can go up or down. While this might seem uncertain, variable rates often start lower than fixed rates and offer features that fixed loans don't provide.

Benefits of switching to variable rates

Variable rate loans come with several advantages:

• Flexibility in repayments: Make extra payments without penalty
• Offset account options: Reduce interest on your loan amount
• Redraw facilities: Access additional payments you've made
• Rate reductions: Benefit when interest rates fall

When refinancing makes sense

Consider refinancing if you want to:

1. Change your loan term to reduce monthly payments or pay off your mortgage sooner
2. Consolidate debts into your home loan at a lower rate
3. Release equity from your property for renovations or investments
4. Access loan options from banks and lenders across Australia for more competitive terms

The refinancing process explained

Refinancing doesn't have to be overwhelming. Here's what typically happens:

Application process: Your mortgage broker will help you compare options and submit applications to suitable lenders. You'll need to provide bank statements, income documentation, and property details.

Assessment: Lenders will evaluate your financial situation, including your income, expenses, and the current value of your property.

Settlement: Once approved, your new lender pays out your existing loan, and you start making repayments under your new terms.

Maximising your refinancing opportunities

A comprehensive home loan health check can reveal opportunities you might not have considered. This process involves:

• Reviewing your current loan structure
• Analysing your repayment capacity
• Exploring options to reduce loan repayments
• Identifying potential for releasing equity in your property
• Checking eligibility for special lender policies

Timing your refinance strategically

The timing of your refinance can significantly impact your outcomes. Starting the process before your fixed rate period ending gives you more time to explore better loan options without pressure. This approach allows you to:

• Compare refinance interest rates across multiple lenders
• Negotiate terms that suit your current circumstances
• Potentially access a better interest rate than your current lender's standard variable rate
• Plan for any changes in your financial commitments

Making an informed decision

Switching from fixed to variable rates isn't suitable for everyone. Consider your:

• Risk tolerance: Variable rates can increase as well as decrease
• Budget flexibility: Can you handle potential payment increases?
• Future plans: Are you considering selling or buying another property?
• Current equity position: Could you benefit from releasing equity to buy the next property?

Working with mortgage broking professionals

At LBK Lending, we understand that every Bulimba resident's situation is unique. Our streamlined application process helps you explore options without the hassle of contacting multiple lenders individually. We can help you understand which variable interest rate products might suit your needs and circumstances.

Refinancing is about more than just rates – it's about structuring your loan to support your lifestyle and financial goals. Whether you're looking to reduce costs, access funds, or improve loan features, the right refinancing strategy can make a significant difference to your financial wellbeing.

Call one of our team or book an appointment at a time that works for you.