Refinancing your home loan

Refinancing your home loan

What is the refinance?

When you change from one lender to another, we call them to refinance.

As things change over time, your needs and circumstances may change as well. When you review your position and find out that you need to re-structure your home loan, you would consider refinancing.

When to consider refinancing?

Refinancing can be considered in the below circumstances:

  • Your interest rate is significantly higher than the comparable product from other lenders. You requested your lender but they cannot help you further.
  • The home loan product is not relevant to your needs anymore, and your current lender does not have the product that you want to switch to.
  • You want to access equity for investment or other purposes (such as maintenance, debt consolidation, building granny flat etc) but you are not getting enough fund release because of the lender valuation being lesser than that from other lenders.
  • You do not feel comfortable using facilities such as credit card, ATM access, branch access, electronic fund transfer etc from your current lender.

Top-Up and Refinance, are they the same?

Many people confuse top-up needs with refinancing needs. When you want to access the equity from your existing property by increasing the loan amount, we call this event the Top-Up. During this process, you will access the equity and review the interest rate as well but you would stay with the current lender.

However, if you want to move out to a different lender with or without having to access equity, we call this the Refinance.

Things to remember:

Before you proceed with refinancing, please remember below:

  • Interest rate is not the only criteria to trigger refinancing decision.
  • Please speak to a home loan consultant and conduct your home loan health check-up.
  • Refinancing involves some additional costs such as mortgage discharge fees, mortgage registration fees etc; Please discuss this with your home loan consultant.
  • Some lenders offer cash rebate to compensate for such costs and these promotional campaigns are run from time to time. Please make sure that you meet strict guidelines to be eligible for such campaigns.
  • If your current home loan is in the fixed-rate product, refinancing to other lender means braking of this agreement. This can attract braking costs. You need to check with your current lender about these costs.
  • If your loan amount is more than 80% of the property value, there would be additional costs for lender mortgage insurance. Refinance is generally not advisable under such circumstances.

What next?

If you are considering to refinance and want to begin with your home loan health check, speak to one of our Home Loan Consultants at Capkon. We will explore the options for you and guide you through the process.


Kiran Thapa

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