Restructuring a home loan: a flexible answer
Changing the conditions of your current home loan with your lender is what home loan restructuring is all about. If you’re having short-term problems like a drop in income or unanticipated costs, this is the best choice for you. Some important qualities are:
Repayment Pause or Extension: Stop making payments for a while or prolong the loan term to lessen your monthly payments.
Interest-Only Periods: For a specific amount of time, only pay the interest on your loans. This will ease the strain on your cash flow.
No New Loan Needed: You don’t have to fill out a new application, which keeps your credit profile intact.
Restructuring is a good option for people who have a good relationship with their lender and don’t require a reduced interest rate right away. But if you prolong the term, it could not lower the total interest you pay throughout the life of the loan.
Refinancing: A Big Change in Strategy
Refinancing implies getting a new loan from a different lender (or the same one) to pay off your current mortgage. This is commonly done to get better conditions. This is good for organising your finances over the long run or when interest rates go down. Some benefits are:
Interest rates are lower: In 2025, variable rates will be about 5% to 6%. If you refinance to a lower rate, you could save thousands of dollars.
Cash-Out Option: Get cash from your home loan to make upgrades or pay off debts.
You can change the length of the loan or switch between fixed and variable rates.
If you want to refinance, you’ll need to fill out a new application, have your credit checked, and pay any fees that may come up (like $500 to $1,000 for discharge and establishment costs). However, if you do it when the market is low, it can lower your overall interest rate by a lot.
Important Things to Think About
Money Goals: Restructuring is good for short-term help, but refinancing is good for long-term savings.
Costs: Refinancing could cost you money, and restructuring could cost you more in interest.
Market Trends: The recent RBA’s rate drop means you should keep an eye on lender offers for refinancing.
Eligibility: Equifax can tell you if you qualify for either choice based on your credit score, equity, and income.
Why Pick Sri Finance?Sri Finance can help you figure out what you need, compare lenders, and restructure or refinance your loan without any problems. Our team makes sure you get the most out of the perks that are right for Australia’s economy.
In conclusion
Restructuring a home loan gives you short-term relief and flexibility, while refinancing gives you long-term savings and flexibility. Look at your finances and talk to Sri Finance to find the best way to get an Australian home loan.
