Refinancing a loan on your investment property can help you grow and improve the value of your portfolio.

Why should you refinance your investment property? Refinancing your loan allows you to access the equity in your property. Equity is the proportion of the property you own – for example, if the property is worth $500,000 and you owe $200,000 to the bank, then you have $300,000 in equity.

Savvy property investors use their equity for a variety of different purposes:

  • To renovate and add value to an investment property
  • As a deposit for their next investment property
  • To fund their lifestyle and living expenses.

Another popular reason to refinance is to secure a more competitive interest rate or a loan that better suits your needs. There may be loan features that can improve your interest savings or cash-flow, like offset accounts and redraw facilities. It pays to talk with your mortgage broker and reassess your property investment loans regularly, to ensure you’ve got the right loan to maximise your financial benefits and tax advantages.

Key Considerations 

1. Market value and equity

Usually, we like to put some things at the back of our minds, especially something major like a mortgage loan. However, if you’ve stayed with the same loan for a few years, it is a good idea to look into other options that are available for you. Generally speaking, you should look into remortgaging your investment property when the equity has grown sufficiently, allowing you to take the next step in your investment strategy or fund renovation for the property. Before refinancing, your property will need a formal valuation. To get an idea of how your property is performing in the current market, download our Instant Property Report.

2. Consider the costs 

Switching lenders and refinancing your investment can take you closer to your goals, but it can come at a cost. Depending on your circumstances, you may need to pay loan break fees or discharge fees, establishment fees for your investment loan, and valuation fees.

3. Investigate how the market is performing 

Refinancing or not will depend on how the property market is performing for your investment. That may mean the location of your investment property will be a key consideration when deciding to refinance. If you refinance your property after its value has decreased, you risk facing negative equity territory. This is when the value of your investment falls below the outstanding balance on the mortgage. In this situation, it may be better to wait until the value of your property improves before you refinance.

4. Other considerations

Other considerations. The investment lending landscape has seen a few changes recently, with APRA’s new regulation and RBA lowest interest rate in history. As a result, we’re seeing many incredible deals popping up in the market, making now a good time to reassess your investment strategies and refinance requirements.

When in doubt, get in touch with a mortgage broker to make an informed decision that will work best for you. If you’d like to access equity to grow your investment portfolio or you just want to know you’re getting the best deal, chat with one of our mortgage brokers today.



Are you tempted to refinance in order to secure a cash back deal? You might have heard lenders offing between $1000 to $4000 cash in hand when they refinance through a particular lender. Is this offer as good as it sounds? Let’s explore your options. 

What is a cashback deal?

This is when a bank or lender offers you rewards or cash to new customers. In some cases the cashback can help pay for any refinancing costs that might be incurred. Other times you’re free to use the cash how you like. 

Generally, cashback deals are not given to everyone, they are mostly suited to refinancers or those who have been paying off their mortgage for a few years, rather than first home buyers. 

Why do lenders give away cash?

Since interest rates have plummeted to new lows as a result of COVID-19 refinancers have been very active to secure lower interest rates. 

According to the Australian Bureau of Statistics more than 200,000 people have switched lenders in 2020. 

Due to this increase in customers looking to refinance, it means more competition among lenders. 

So, should I refinance for a cashback?

Generally speaking, a cashback is a great incentive and perk especially to help with cash flow. 

However some lenders might be offering higher fees than others which might cancel out the cashback in the long run. 

By speaking to your mortgage broker they will be able to provide you with this advice and assess it with your unique situation. For some, it could be a great win, for others there might be better options on the market, especially in today’s low interest rate environment.

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