3 signs you should refinance your home loan.

Home loans can be a tricky business, with fluctuating interest rates, contrasting customer service levels and a host of other factors all contributing to significant differences between lenders.

Accordingly, many Australians find themselves in a position where they decide to switch, taking advantage of better loans on offer elsewhere to move away from their original lender.

This can be a great way to reduce your regular mortgage repayments, and therefore the overall loan cost, but it's important to understand the right time to refinance a home loan. Luckily, there are a few clear signs that can indicate a need to switch, and in this article, we'll take a closer look at three of these.

1. Changes in payment amounts.

   A popular reason for refinancing is noticing the amount you pay each month has slowly increased over time. There are all sorts of reasons that this could happen, from changes in fee amounts through to increased interest rates, but it's important not to let these increases slide. Even a tiny change in the amount of interest you pay each month could add thousands of dollars to your loan, making what's already a significant financial commitment even more of a drain on your bank account.
   
   Alternatively, your payments may have stayed the same, but are no longer in line with what other lenders are offering. In this scenario, you could save money on your repayments by switching to a slightly more competitive home loan.

2. Changes in your financial situation.

   While wanting to change the financial composition of your loan is one of the most common reasons for refinancing, switching lenders can also be helpful if your financial situation has changed. For example, if you've recently received a pay rise at work and want to pay off your mortgage sooner, it's critical to have a home loan that allows for additional payments to be made. If this isn't possible with your current loan, switching makes sense as it could allow you to become debt-free in a shorter period of time.
   
   On the other side of the coin, if your financial situation has changed in other ways - such as moving to a lower-paying job - switching your home loan could allow you to reduce your monthly repayments by extending the overall repayment period. Alternatively, you may have a variable rate home loan, which makes budgeting for repayments slightly unpredictable. In this scenario, moving to a fixed rate home loan may provide you with added security.

3. Lender dissatisfaction.

   While money is often the driving force behind refinancing decisions, sometimes a change is necessary due to dissatisfaction with other aspects of a home loan or lender. This could be confusion as to how much you're expected to pay each month, or simply being unhappy with the level of customer service offered.
   
   Too often, borrowers feel locked into their loans, which can make these issues incredibly frustrating and difficult to resolve. To avoid this stress, refinancing provides a simple, painless exit strategy, allowing you to move your loan across to a lender that better understands you and your needs, and is equipped to help.