Christmas is always hard on the hip pocket so families will be looking to find ways to save in the new year.

Those banking on lower interest rates to boost their post-silly season finances might need to consider other ways to top up the coffers, with the bulk of the nation’s economists predicting the rate-cutting cycle is over.

Brent Rollings, director of Astute Brent Rollings, says one of the best ways for people to improve their financial health is by reviewing one of their biggest debts.

“Your home loan should work as hard as you do,” he said. “Reviewing it from time to time can help ensure it still suits your lifestyle, financial goals, and borrowing needs.

“If you’ve had the same loan for several years, chances are your circumstances have changed and so have the options available to you.”

Refinancing is an opportunity for people feeling the pinch of the cost-of-living crisis to find a new loan that may better suit their needs.

“This could help lower repayments, reduce a loan’s term and provide more flexibility,” he added.

“It puts people in control of their finances and potentially helps them pay off their home sooner.”

There are many reasons for home owners to refinance but Rollings said the key driver is usually to find a lower interest rate.

“Often people only see the upfront monthly saving of refinancing and then they shrug it off like it’s not worth the hassle. But it can be long term.”

People can save approximately $45,000 by reducing an interest rate from 5.75 to 5.25 per cent over 25 years on a $500,000 mortgage. On a $700,000 loan the saving is approximately $63,000 and for a $1,000,000 loan the rate reduction saves $90,000.

“Banks might offer discretionary discounts when you take out a home loan but that might change over time,” he said.

“So unless you're doing your own homework you may have lost any advantage you had when you initially took out the loan.

“My advice to people is to continue to check that banks are doing the right thing by you and offering the best competitive outcome for your needs. If not, that's where we can help.”

Home loans can also offer a range of features such as redraw facilities, offset accounts, or flexible repayments that people might need at different stages in their life.

“Refinancing can give home owners access to equity for renovations, investments, or lifestyle goals and better options when a fixed-rate period ends,” he said.

“Some homeowners also refinance to switch loan types. They might want to move from a variable-rate loan to a fixed-rate option, or choose a split loan that combines the certainty of fixed repayments with the flexibility of a variable rate.”

Rollings also suggests those looking to consolidate their debt by rolling personal loans, car loans, or credit cards into one manageable repayment should investigate their refinancing options.

While refinancing can offer financial benefits, it’s important to weigh up the costs involved.

These may include exit fees on your current loan, as well as establishment, settlement, and ongoing fees on the new loan.

People with less than 20 per cent equity in their property could also face additional costs for Lenders’ Mortgage Insurance or a low-deposit premium when refinancing.

“Comparing the overall cost, not just the interest rate, can help you make an informed decision,” Rollings said.

Loan packages with an annual fee may also be worth considering, as they often include interest rate discounts and flexible features to help reduce the interest you pay over time.

“It’s also wise to review your insurance cover to ensure it still suits your needs throughout the life of your loan,” he added.

“If you are considering refinancing your home loan or if you would like a free home loan health check, we are here to help.”

For more information contact the mortgage broking team at Astute Brent Rollings on 0408 455 454, visit them at Office 3, 88-90 Terralong Street or email [email protected]

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