Commonwealth Bank of Australia (CBA) receives one of our top recommendations for refinancing. Whether it is for an existing home loan with the bank or switching from another lender, refinancing with CBA is a great option to land the best possible interest rates.
Refinancing has never been more popular among Australian homeowners. August of 2021 was the biggest month for refinancing in the nation’s history, with 300,000 deals completed. Current low interest rates had a huge impact on these numbers.
If you have been thinking about refinancing your mortgage, this might just be the right time to take the leap. Or if you have already made up your mind, there are a few great solutions and plans CBA has to offer.
Why Refinance With CBA?
- Competitive fixed rate or standard variable rate home loans
- Get discounts and save money to pay off your loan sooner through CBA’s Wealth Package
- Flexible loan options to help reduce your interest
- Easy tracking and managing of your home loan and your property’s performance through ‘CommBank My Property’ feature
- Multiple free offset, redraw and flexible repayment features
What Is The CBA Refinancing Process Like?
If you choose to refinance with CommBank, we have a step-by-step guide.
Step 1: Assessing Your Current Home Loan Situation
What is your refinancing purpose? Is the current home loan not working for you or are you just looking to add more benefits?
The first step of refinancing is figuring out what you want to achieve.
Your reasons for refinancing could include the following:
- To get better value
- To consolidate debt
- To get updated banking features
Step 2: Selecting Your New Home Loan
Your reason for refinancing will guide you in choosing a new home loan, based on your needs.
CBA offers an array of home loan options to choose from:
- Standard Variable Rate: Flexibility, with various features and benefits.
- Fixed Rate: Be certain of your rate for 1-5 years, knowing your repayments in advance.
- Extra Home Loan: Low variable rate for the life of your loan.
- Viridian Line of Credit: Access the equity in your home.
Step 3: Analyse The Costs Of Your New Home Loan
One of the most important steps when switching to a new home loan is calculating the costs. Refinancing makes sense only if the costs don’t outweigh your current loan expenses.
Here are the possible refinancing charges:
- Exit Fees: Amount you pay when you leave your current lender. Includes discharge fees, administrative fees and break costs. (We have listed mortgage discharge forms for different lenders in a single place for your convenience.)
- Upfront Fees: Amount you pay to establish a new home loan. Includes establishment fees, government charges and Lenders Mortgage Insurance (LMI).
- Ongoing Fees: Amount you pay during the life of a new home loan. Includes loan service fee and Wealth Package fees (optional).
Step 4: Apply For A Home Loan
After going through home loan options and possible expenses, the next step is to pick a home loan and apply.
You can apply online, over a call, or in a CBA branch. CBA will assess your income, repayment history and financial commitments. A property evaluation might also be conducted.
You will find out if your home loan application has been approved when and if you receive an offer letter.
Step 5: Settlement
Once your application is approved, you’ll receive a loan contract through email. When you have signed the contract, it moves towards settlement.
As the first part of settlement, the homeowner has to sign a discharge document with the previous lender to let them know they are switching to CommBank. When the current home loan is finally closed, settlement is complete and you’ll know when to start making repayments on the new home loan.
What Offers Am I Getting On CommBank Refinance?
CBA is currently offering a $2,000 cashback to homeowners refinancing with them.
The cashback offer is available on:
- Owner-occupier home loans
- All investment loans
You must apply by 31 December 2021 and have your loan funded by 31 March 2022. The minimum refinance amount is $250,000. The offer is not available for bridging loans.
Low 2-Year Fixed-Rate home loan (Owner-Occupier) With Wealth Package
A CBA Wealth Package offers a 0.15%-a-year discount with no establishment fee or monthly loan service fees for refinancing. The minimum lending balance for a Wealth Package is $150,000.
- 1.99% a year principal and interest rate
- 3.94% a year comparison rate
If you wish to know more about CBA, Home Loan Experts’ CBA Lender Review can help.
How Can Refinancing With Major Banks (like CBA) Be Risky?
High Closing Costs
Banks will add closing costs to your tab, along with extra charges like application fees and loan processing fees. These will add up. Another thing to watch out for is sometimes banks will offer to waive closing costs but a hike up in a plan’s interest rate might not be visible.
Longer Repayment Period
Banks will often offer you a lower interest rate for a longer term, but you might miss the fact that it will likely cost the same as (or more than) your current home loan.
Slow Approval Process
Property valuation, application scanning – there are a lot of procedures banks just can’t skip.
The timeline for your refinancing application and final settlement longer with banks than with mortgage brokers.
Why Should I Use A Mortgage Broker To Refinance My Loan?
Banks can be overwhelming if contacted directly, with all their expenses. Mortgage brokers can help take the uncertainty down a notch.
If major banks are not the ideal fit for your refinancing, mortgage brokers might have solutions for you. Brokers can provide:
- Access to dozens of lenders, giving you the freedom to choose desired interest rates.
- Help dealing with offset accounts, redraw facilities, and strategies for extra repayments.
- A review of your application and help improving it to increase your chances of approval.
- Help weighing the pros and cons of going with a fixed or a variable rate.
- Help deciding whether refinancing is a good idea for your current situation.
Our mortgage experts can help you dodge unnecessary expenses and find the best refinancing plan. From finding the suitable interest rate to choosing the best mortgage repayment plan, Home Loan Experts guides you through.
If you are considering refinancing your home loan or already have decided to do so, our Experts will make the process easier for you.
Home Loan Experts can help you pick the right lender and evaluate your home loan situation for the best possible outcome. Give us a call on 1300 889 743 or fill in our free online enquiry form.