If you're serving or have served in the Australian Defence Force, you understand the value of stability and planning ahead. When it comes to your mortgage, switching from a variable interest rate to a fixed interest rate through refinancing can provide that financial certainty you're looking for.
Why Consider Switching to Fixed Rates?
Variable interest rates can fluctuate with market conditions, making it challenging to budget for your monthly repayments. A fixed interest rate locks in your rate for a set period, typically between one to five years, giving you predictable mortgage payments.
This stability is particularly valuable for Defence Force members who may face:
- Deployment schedules that affect income timing
- Potential relocations requiring careful financial planning
- The desire to consolidate debts into one manageable payment
Understanding Your Refinancing Options
As Finance & Mortgage Brokers specialising in Defence Force lending, we can access loan options from banks and lenders across Australia. This means you're not limited to your current lender's offerings.
When considering refinancing, you might also want to:
- Change your loan term to reduce loan repayments
- Release equity to buy the next property
- Take advantage of accessing a lower interest rate
- Explore better loan options suited to your current financial situation
The Application Process Explained
Refinancing involves several steps, but the process doesn't have to be overwhelming. Here's what typically happens:
- Assessment of your current loan: We'll review your existing variable interest rate and loan amount
- Financial review: Examination of your banks statements and current financial situation
- Lender comparison: Accessing different refinance interest rates from multiple lenders
- Application submission: A streamlined application process tailored to your needs
Special Considerations for Defence Force Members
Defence Force personnel often have access to unique lending policies. We can check eligibility for special lender policies that might offer:
- More favourable loan terms
- Reduced fees and charges
- Flexible repayment options during deployment
- Recognition of Defence Force employment stability
When Does Refinancing Make Sense?
Consider refinancing from variable to fixed if:
- Your current variable rate has increased significantly
- You're approaching a fixed rate period ending and want to secure another fixed term
- You want to consolidate multiple debts into your mortgage
- You're planning to release equity for investment or other purposes
- Market conditions suggest rates may continue rising
Weighing the Costs and Benefits
Refinancing isn't just about the interest rate. Consider these factors:
Potential benefits:
- Predictable monthly payments
- Protection from rate rises during the fixed period
- Opportunity to restructure your loan
- Possible access to additional features
Costs to consider:
- Discharge fees from your current lender
- Application fees for the new loan
- Valuation and legal costs
- Break costs if leaving a fixed rate early
Making the Right Choice for Your Circumstances
Every Defence Force member's situation is unique. Your decision should align with your financial goals, risk tolerance, and future plans. Consider:
- How long you plan to stay in your current property
- Your capacity to handle payment increases if rates rise
- Whether you're looking to access equity for other investments
- Your overall debt consolidation strategy
Documentation You'll Need
Preparing your paperwork in advance can speed up the process. Typically required documents include:
- Recent banks statements
- Pay slips and tax returns
- Details of your current mortgage
- Identification documents
- Property valuation (may be arranged by the lender)
As specialists in Defence Force lending, we understand the unique aspects of military pay structures and can help present your application in the most favourable light to lenders.
Switching from variable to fixed interest rates through refinancing can provide the payment certainty that complements your military lifestyle. With access to numerous lenders and special Defence Force lending policies, you have options that extend well beyond your current bank's offerings.
Call one of our team or book an appointment at a time that works for you to discuss your refinancing options and find the right solution for your financial situation.
