Three life-enhancing things refinancing could give you the opportunity to do

Refinancing is one of those boring admin tasks that can often be relegated to our perpetual to-do list. But there are some compelling reasons it shouldn’t be.

Once we finish up the stressful and exciting process of buying a home, our mortgage tends to fly under the radar with a “set and forget mindset”. Yet the loan market doesn’t settle – it is always in flux, so you could be missing real opportunities.

“The best time to refinance really depends on your individual situation,” says Daniel Oertli, chief executive of Unloan, the new CommBank-backed lender aiming to simplify home loans.

“The common reasons for refinancing include coming to the end of your fixed rate, you haven’t reviewed your interest rate in a while and could get a better deal to lower your monthly repayments, or if you’d like to access the equity in your home.”

But here are three other potential boons that could be unlocked by refinancing that you may not even have considered.

Start a long-overdue renovation 

Does the heart of your home need a much-needed facelift, or perhaps you’d benefit from an upgraded work-from-home space? 

Once you’ve paid down your existing home loan and created some equity – cash out refinancing is an option that allows you to sign a new loan for the value of your house, with a higher balance than your current loan. The difference between the two loans is then paid out to you in cash.

You can use these unlocked funds to finally tackle your renovation list.

Of course, the advantages of renovating go well beyond living in a nicer home, and can increase your immediate and future wealth. 

Consider investing in better insulation, solar panels and battery storage, and other energy-efficient features that lower your bills now and increase your home’s appeal to future buyers, should you decide to sell. 

Jet off on your dream holiday

While it can be a financially-savvy move, you don’t have to spend your extra cash on the house itself.

Freeing up funds through refinancing could go towards travel you might otherwise have to put off – you could celebrate a milestone birthday in an unforgettable way, or bond with your family on a lap of Australia or in their ultimate overseas destination. They’ll be talking about it for years to come. 

James Smith, seasoned traveller and founder of travel booking site Travel Lingual, has refinanced and advises doing your research so you make the right decision for your particular situation. 

“If you’re a travel fan, refinancing can be a great way to get the cash you need to plan that dream getaway without running up high-interest bills. Just look at the pros and cons of each type of refinancing.”

Thankfully, applying to refinance doesn’t have to take too much time away from researching the sights you’ll see on your travels. 

Unloan offers a quick, digital application process and world-class user experience, aiming to put value back in customers’ hands. 

“We heard that customers wanted a home loan provider who was on their side,” says Oertli, “So, we undo the complexity by making the refinancing application process simple, helping eliminate some of the hassle and stress along the way.”

Maintain your lifestyle

Of course, during a cost of living crisis, for some simply being able to maintain their lifestyles thanks to refinancing is a big win.

Content writer Rochelle Gunn decided to refinance in mid-2023 when her fixed rate loan was about to expire and she was facing a 4 percentage point jump in interest.  

“I was very concerned about how much my monthly repayments were going to increase, so I was looking around for a loan to minimise how big of a jump the repayments were going to be,” says Gunn, owner of a 1960s-era three bedroom home in North Perth. 

This was the second time Gunn had refinanced since purchasing in 2018. This time she found a provider offering a cashback incentive, which enticed her to switch banks even though the interest rate ended up about the same as her original lender.

“But because of the cashback I received for switching, I ended up with a bonus influx of funds that I could use as a buffer while I adjusted to the higher repayments,” she says. 

This way, Gunn didn’t have to cut back on the things she loves, such as days out visiting museums. 

Different incentives work for different people – you might want lower interest rates, fewer fees, or to find a provider who elevates customer service. 

Daniel Oertli says Unloan rewards loyal customers by reducing their rate every year by default, and there are no application fees, ongoing account fees or exit fees. 

“We believe that home loans should be simple to get and easier to live with,” he says. “And we believe loyalty should be rewarded, that’s why for every year our customers stay with us, up to 30 years, they’ll receive a discount. ”