When interest rates are rising, it may seem counter intuitive to consider refinancing loans. However, there are several reasons why people should still evaluate refinancing options in such a scenario.
Refinancing loans & interest rates

If you currently have a loan with a higher interest rate, refinancing allows you to secure a new loan with a lower rate. By doing so, you can reduce your monthly payments and potentially save money over the long term.

And yes, we know this is a ‘No Brainer’ and goes without saying, however refinancing presents an opportunity to modify the terms of your loan. You may opt for a shorter loan term to pay off the debt faster, saving on overall interest payments. Alternatively, you could extend the loan term to lower your monthly payments, providing more financial flexibility. Many people don’t consider this!

If you have multiple loans or debts with varying interest rates, refinancing allows you to consolidate them into a single loan. This simplifies your financial obligations and may result in a lower overall interest rate, reducing your monthly payments.

If you currently have a variable-rate loan, rising interest rates can lead to increased payments. Refinancing into a fixed-rate loan provides stability and protection against further rate hikes, ensuring your payments remain consistent.

Refinancing can enable you to tap into the equity built up in your home or other assets. By refinancing at a higher amount, you can receive cash that can be used for home improvements, debt consolidation, education expenses, or other financial needs. You, however, need to be able to service your new loan and negotiate with the lender.

If your credit score has improved since taking out the original loan, refinancing allows you to secure a loan with more favourable terms. A higher credit score can lead to lower interest rates, reducing the overall cost of borrowing.

Lenders often introduce promotional offers during periods of rising interest rates to attract borrowers. These offers may include discounted rates, waived fees, or other incentives, making it a favourable time to refinance.

It’s important to note that the decision to refinance should be based on careful evaluation and consideration of various factors, such as the costs associated with refinancing, the length of time you plan to stay in the property or hold the loan, and your overall financial goals.

It is advisable to consult with financial professionals or loan experts/brokers to assess your specific situation and determine if refinancing is a suitable option for you. If you would like a complimentary review, please contact info@armada.com.au

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Osborne Park Office

18 Sangiorgio Court, Osborne Park WA 6017
Locked Bag 4, Osborne Park DC WA 6916
Mon - Fri: 8.00 am - 5.00 pm

Port Hedland Office

15 Edgar Street, Port Hedland WA 6721
Locked Bag 4, Osborne Park DC WA 6916
(08) 6165 4067

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Armada Accountants & Advisors acknowledges and pays respect to the past, present and future Traditional Owners and Elders of this nation and the continuation of cultural and spiritual practices of Aboriginal and Torres Strait Islander peoples. Armada also acknowledges the Traditional Owners of the land where our Perth and Port Hedland offices are located, the Whadjuk Noongar People (Perth) and Kariyarra People (Port Hedland).

Armada Accountants Pty Ltd – ABN 79 009 298 542, Armada Financial Planning Pty Ltd – Corporate Authorised Representatives of Armada Wealth Management Pty Ltd AFSL 535978, Armada Lending Pty Ltd – ABN 20 603 067 983 – Authorised Corporate Credit Representative (470054) of BLSSA Pty Ltd (ACL 391237), Armada Audit Services Pty Ltd – ABN 39 151 015 002, Armada Business Services Pty Ltd ABN 29 008 762 481 are members of the Armada Group. Each member of the Armada Group is a separate legal entity in its own right and is not in partnership with any other members of the Armada Group. Liability limited by a scheme approved under Professional Standards Legislation.


Armada Accountants & Advisors acknowledges and pays respect to the past, present and future Traditional Owners and Elders of this nation and the continuation of cultural and spiritual practices of Aboriginal and Torres Strait Islander peoples. Armada also acknowledges the Traditional Owners of the land where our Perth and Port Hedland offices are located, the Whadjuk Noongar People (Perth) and Kariyarra People (Port Hedland).

Copyright © 2024 Armada Accountants & Advisors.
ALL RIGHTS RESERVED 

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