Nathan from Linton Finance in the Hills explains why refinancing matters now more than ever.
With the cost of living rising and interest rates fluctuating, many families in the Hills District are feeling the financial pinch. Whether you’re looking to reduce your monthly repayments, free up extra cash for household expenses, or invest in your home’s future, refinancing could be a powerful tool to help you stay ahead.
Refinancing is not just about securing a better rate—it’s about taking control of your financial future, unlocking investment opportunities and maximising your wealth potential. In this guide, we’ll cover how refinancing works, how much you could save, and the key strategies to make the most of your mortgage.
Understanding Loan-to-Value Ratio (LVR)
One of the key factors affecting your interest rate is your Loan-to-Value Ratio (LVR), which represents the percentage of your property’s value that you’re borrowing. For instance, if your home is valued at $1,000,000 and your mortgage is $500,000, your LVR would be 50%.
As property prices in the Hills District continue to rise, homeowners are seeing their LVR improve—meaning they could qualify for more competitive loan rates. Ideally, your mortgage balance has also decreased over time, further enhancing your borrowing position.
The power of refinancing: how much could you save? Is It really worth It?
Let’s break it down:
- Average NSW mortgage: $785,405
- Average asking price for a Hills District house: $1,893,434 (Source: [SQM])
- Example current interest rate: 6.5%
- Refinanced interest rate: 5.94%
At 6.5%, the monthly repayment on a $785,405 mortgage over a 30-year term is $4,971. At 5.94%, that repayment drops to $4,686.
That’s a monthly saving of $285—or over $102,833 over the life of the loan.
Supercharging your savings with an offset account
An offset account is a transaction account linked to your mortgage. Any money in this account offsets your loan balance, reducing the interest charged.
By directing the $285 monthly savings from refinancing into your offset account, you not only lower the interest paid but also accelerate your loan payoff date significantly.
It won’t change your monthly repayment amount, but it will mean that more of your repayments go toward the principal payment on your loan.
- Over time, this strategy could save an additional $147,314 in interest.
- This brings total interest savings to $250,147—potentially shaving years off your mortgage.
Other benefits of refinancing
Beyond lowering your home loan interest rate and monthly repayments, refinancing opens doors to other strategic financial moves:
- Debt consolidation: Combine high-interest debts like credit cards, personal loans, car loans, and BNPL balances into one lower-interest mortgage repayment.
- Equity access for renovations: Tap into your home equity to fund value-boosting renovations like a new kitchen, bathroom, or even a pool.
- Investment property expansion: Use extracted equity as a 20% deposit + costs on an investment property—without using your home as additional security.
Final thoughts: why now?
With property values in the Hills District rising and banks rewarding lower LVRs with better rates, now could be the perfect time to review your mortgage. As demonstrated above, even small interest rate reductions can result in significant long-term savings, helping families ease financial pressure and build wealth.
If you’d like to explore your refinancing options, we’re a local brokerage in the Hills District, helping Australians save money and take control of their financial goals.
If you’d like to review the health of your loan or talk to one of Linton Finance’s mortgage brokers about your situation, you can book an appointment here or visit our website Linton Finance Mortgage Brokers.
