Thinking of refinancing? Here’s 5 important considerations

The cash rate is currently four percentage points higher than it was at the beginning of 2022, and it’s clearly influencing our purchasing behaviours (eating in is cool again), and for some, our quality of sleep!

If an increase in loan repayments or the potential for an increase (i.e. if you have a fixed-rate term expiring soon), is keeping you awake at night remember, you have options. Refinancing your existing borrowings to a better finance deal could be just what you need to get your shut-eye back on track.

We’ve seen a dramatic increase in the number of clients looking at refinancing options this year and it’s important to note, in the current market, lenders vary greatly in what they can offer.

Looking for the lowest interest rate possible isn’t necessarily the best way to save, there are several other factors to consider that could save you time and money, and knowing which lenders’ criteria is going to work for your situation is the key to a better finance deal all round.

Here are 5 key differences in the way lenders will qualify a loan refinance:

1. Loan-to-Value Ratio (LVR):
The amount of money one lender to another will allow you to borrow for a refinance can vary significantly. Additionally, some lenders will offer more favourable loan terms if you have a lower LVR (the amount of money you wish to borrow as a percentage of the equity you hold in your property).

2. Credit Score Importance:
Some lenders place a greater emphasis on credit scores when refinancing, as borrowers have an established credit history. Good credit scores can lead to better interest rates and loan terms. Other lenders will be more lenient.

3. Loan Purpose:
Refinancing purposes vary, such as debt consolidation, renovating, or switching to a fixed-rate loan. Some lenders will be more responsive to certain purposes when assessing loan eligibility.

4. Documentation Requirements:
The level of documentation required for a loan application can differ greatly between lenders. Some specialise in low-documentation loans, others will want a full submission. If you are looking to refinance with your existing lender, this can also reduce the documentation needs.

5. Interest Rate Negotiation:
Some lenders may be more willing to negotiate interest rates and fees with existing customers looking to refinance, as they aim to retain their business. Of course, if you know what one lender is offering in comparison, this will further improve your ability to play one lender off against the other and negotiate a better deal.


It’s also worth noting that some lenders offer special programs or incentives for specific groups of borrowers, such as medical professionals or teachers. These programs usually have unique qualification criteria and benefits, so it pays to know which lender is going to better cater to your personal situation.

Getting a better deal on your home loan starts with a simple phone call or text so reach out to your Green Team Finance Broker today, or click on the button below and we’ll be in touch shortly.


THE FINEPRINT: The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. While all care and attention are taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances.

Green Finance Group Pty Ltd ACN 145 035 221 is authorised under LMG Broker Services Pty Ltd ACN 632 405 504 Australian Credit Licence 517192.

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