Mistakes To Avoid When Refinancing Your Home Loan

Refinancing your home loan is a big decision. This article covers some of the key mistakes to avoid when refinancing, to help guide you towards a more well-informed decision.


cost of refinancing

Mistake #1: Focusing only on the dollar savings

The overall cost of refinancing is an important consideration when deciding whether to switch lenders.

When refinancing your home loan, it’s possible that your cashflow may improve monthly, but what can often be overlooked is that the total cost of the loan may be higher due to a longer loan term, for example, or the fees involved in switching your home loan.

By calculating the long-term costs involved, you can make a more informed decision about whether refinancing is a good idea for you.

Check your credit report

Mistake #2: Not checking your credit report

If you’re looking to refinance your home loan, then it’s important to understand how a lender may use your credit score to assess your application. Keeping an eye on your credit report and taking proactive steps to improve your credit score, could increase your chances of securing more favourable loan terms. 
refinance terms

Mistake #3: Thinking short-term

When refinancing, it's important to consider your long-term financial stability. Have a think whether the new terms extend the length of the home loan too far or increase your monthly repayments beyond your comfort level. Carefully evaluating these factors can help you make the right decision for your situation and avoid financial hardship down the track.
financial goals

Mistake #4: Not looking at the bigger picture

Before looking to refinance, it could be a good idea to clarify your financial goals. Consider factors like your current situation, future career aspirations or plans to move, and any potential changes around your income or job security. This will help you decide if refinancing is the right decision for you at this moment in time.
Two borrowers compare different lenders

Mistake #5: Taking the first offer

Take the time to compare interest rates, fees, and loan terms from different lenders. Reviewing your options could lead to increased savings, lower fees or increased flexibility in some circumstances – so it could be worth shopping around.
help from mortgage broker

Mistake #6: Doing it all yourself

The refinancing process can be a bit confusing. With so many lenders to choose from and so many different types of home loans available – you may decide to get help from a mortgage broker when looking for the right home loan. Their expertise can help you understand the full range of home loan options available to suit your individual situation.


We’re here to help

Got a question? Our team of lending specialists are here to help you understand your options when refinancing your home loan to Pepper Money.  Simply give us a call on 137 377, or get started by trying our online borrowing power calculator.


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Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.

All applications are subject to credit assessment, eligibility criteria and lending limits. Terms, conditions, fees and charges apply. 

The results of the borrowing power calculator are based on information you have provided and is to be used as a guide only. The output of the calculator is subject to the assumptions provided in the calculator (see 'about this calculator') and are subject to change. It does not constitute a quote, pre-qualification, approval for credit or an offer for credit and you should not enter commitments based on it. The interest rates do not reflect true interest rates and the formula used for the purpose of calculating estimated borrowing power is based on the assumption that interest rates remain constant for the chosen loan term. Your borrowing power amount will be different if a full application is submitted and we complete responsible lending assessment. The results in the calculator do not take into account loan setup or establishment fees nor government, statutory or lenders fees, which may be applicable from time to time. Calculator by Widgetworks.

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