Refinancing considerations

Discussion in 'Loans & Mortgage Brokers' started by Hetty, 2nd Apr, 2020.

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  1. Hetty

    Hetty Well-Known Member

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    I’m refinancing to take advantage of a much better variable rate. The loan has 26 years remaining currently. My broker has suggested we go to 30 years for the refinance.

    I’m of two minds. I’m thinking it’s good to have the extra cash especially with everything going on and this can be put into my non deductible debt. But then I think it’s also starting again.

    Thoughts? It’s an extra $300/month if I go to 25 years.
     
    Hetty, 2nd Apr, 2020
    #1
  2. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    There's nothing stopping you paying the extra $300/mth on top. Best of both worlds then.

    We ALWAYS take loans back out to 30 years - it maximises borrowing capacity and reduces risk - everything an investor needs.
     
    Jess Peletier, 2nd Apr, 2020
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  3. Lindsay_W

    Lindsay_W Well-Known Member

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    In my opinion - Always go for longer term if you can, as you can always make extra repayments on a variable rate loan should you wish to reduce the loan term
     
    Lindsay_W, 2nd Apr, 2020
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  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Borrow money when you dont need it , IF you are good with money.

    loan term is an abstract concept in most cases
    ta
    rolf
     
    Rolf Latham, 2nd Apr, 2020
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  5. Hetty

    Hetty Well-Known Member

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    Thanks everyone :) will leave it at 30 years.
     
    Hetty, 2nd Apr, 2020
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Its not extra cash but better cash flow which can be used to build up reserves in offset accounts, pay down non-deductible debt, or as Jess mentioned still allow you to pay off at the same rate - but with a fall back option in case things get tough.
     
    Terry_w, 2nd Apr, 2020
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  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    And to add

    Extra cash aside for opportunities

    ta
    rolf
     
    Rolf Latham, 2nd Apr, 2020
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