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Astute mortgage holders will undergo a comprehensive mortgage check every few years. It makes perfect financial sense to do so given the current competition between banks and non-bank lenders and the regular fluctuation of interest rates.

If you are considering refinancing, be sure to avoid the following oversights:

  1. Automatically refinancing with your current lender without shopping around – loyalty should not be a consideration in the home loan game!
  2. Switching loans or lender without being 100% certain of the total costs including discharge fees, establishment fees, legal costs, ongoing fees, etc.
  3. Being enticed by honeymoon rates, which ultimately revert to a higher rate at the end of the introductory period.
  4. Turning short term debt into long-term debt by refinancing to use equity to pay off credit cards without seriously changing your spending behaviour.
  5. Rushing through the process without reading the fine print and making quick decisions just to get a good rate.
  6. Not asking for help from a professional if the process seems too daunting or difficult. A mortgage broker can often end up saving you big dollars.

Refinancing your mortgage means repeating the whole home loan procedure, so be prepared for a thorough and sometimes time consuming process. It's worthwhile making sure your credit records are in the best possible shape before you even start. This will go a long way to avoid stress and frustration further down the line. Lowering credit card limits to manageable levels can also help.