Thursday, June 9th, 2011 - Your Money Magazine
Interest rates may have stayed put this month but for many mortgagees the news offers little relief.

Many first homebuyers are feeling trapped in a 25- or 30-year mortgage, faced with punishing interest rates and fees on top of household expenses. And with many economists predicting an official interest rate increase as early as July or August, things could get worse.

The good news is that mortgagees could get a better deal by switching or refinancing their home loan. Research by Your Money Magazine has found the best refinancing loan offers a saving of $13,746 compared to the market average.

There are many valid reasons for choosing to refinance. According to Your Money Magazine managing editor Jackie Pearson, concern about interest rate increases and the desire to find a cheaper loan rated high on the list of factors influencing the decision to refinance.

“Households are certainly feeling the pressure of loan repayments and mortgage stress is a real issue in Australia,” said Pearson. “Lenders are forecasting that more households will experience mortgage stress in the coming months as the number of borrowers falling behind with repayments grows.”

Fortunately, the current soft market means both bank and non-bank lenders are competing harder for business, so a more competitive deal than your current home loan may be available.

“If you’re unhappy with your current home loan deal, don’t wait until it gets out of control. Shop around now - lenders are looking for more business so it’s a great time to go home loan shopping,” said Pearson.

However, Pearson warns that refinancers should do their research before switching to an alternative loan.

“Depending on your situation, the size of your loan and how much your property is worth, refinancing can be an excellent strategy, but it doesn’t always work,” said Pearson. “The biggest mistakes you can make are to refinance your current loan without shopping around for a better deal or to switch loans or lenders without being clear on the total cost.

“Make sure you consider all the costs involved as well as the benefits – the current issue of Your Money Magazine has a cut-out calculation that will help you find out if refinancing will save you money and a list of the cheapest loans to match your situation,” said Pearson.

The current issue of Your Money Magazine includes helpful tips and case studies on how to make refinancing work, as well as a list of the best refinancing mortgages and cheapest loans to help you save. On sale Friday 10 June at your local newsagent or online at www.yourmoneymag.com.au.

-ends-

TwitterCue: Home owners should consider #refinancing to relieve rising #mortgage stress according to Your Money Magazine

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Your Money Magazine


Your Money Magazine is for all Australians looking to increase their personal wealth and achieve the lifestyle they desire. Your Money Magazine’s key focus is to educate the Australian public about money management by providing down-to-earth, easy-to-comprehend content, detailed product comparisons across a range of categories, and recommendations from some of the country’s leading industry experts.

Combining in-depth research and product comparison tools with shrewd financial education materials, Your Money Magazine takes a unique place in the Australian market allowing readers to not only compare existing products but to educate themselves and take decisive action all in one place.

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Lisa Narroway
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W: www.yourmoneymag.com.au

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