The different types of refinance loans

Whether you’re wanting to take out more cash, put more cash in, or just consolidate the other debt you have, it’s important to make sure you are doing the right thing for your financial situation.

Rate-and-term refinance

The most common refinancing option is a rate-and-term refinance. The purpose of a rate-and-term refinance is to change your interest rate and/or term of your home loan while keeping your loan amount the same (of course you’ll need to keep a little extra to cover the cost of refinancing). You might consider a rate-and-term refinance if you’re currently on a variable rate and interest rates are in a rate-lowering cycle.

Cash-out refinance

This refinancing option is for when you want to borrow a little bit extra on top of your existing loan amount. To do this, you convert some of your home equity to increase your home loan’s principal amount. This gives you some extra cash at the end of your refinance to put towards things such as renovations, repairs, or a deposit on an investment property purchase.

Cash-in refinance

A cash-in refinance means you are lowering your overall loan amount by contributing a lump sum amount. To do this you take out a new loan that is less than your old loan amount and pay whatever is left so the old loan can be closed. The benefits of cash-in refinances are that they reduce your loan’s principal amount, can help you lower your new loan amount to get below a certain LVR (Loan to Value Ratio), and will result in reduced repayments.

Consolidation refinance

Consolidation refinance enables you to combine your other debts - for example, credit cards, personal loans and car loans - and turn them into one debt and one repayment. When you refinance your home loan, your new loan amount will include the total amount of the debt you want to consolidate as well as your current home loan balance. Your lender will pay off each credit facility you wish to consolidate, and will add this amount to the total of your new loan, along with the amount left on your old home loan. Please note, Qantas Money Home Loans doesn’t offer this kind of refinance option at the present time.

Always come out on top

There are many different ways to refinance your home loan, so it’s important to consider your options carefully and make sure that refinancing means you’re left in a better position.

Want to know how much you could save by switching to a Qantas Money Home Loan? Try our refinance calculator.

Need any help?

Our home loans experts are available on 1300 992 700 Monday to Friday: 8:00am to 6:30pm and weekends 9:00am to 5:00pm (AEST) to help answer any questions you may have. You’re under no obligation to apply, we just want to help you find the Qantas Money Home Loan that’s right for you.

You have to be a Qantas Frequent Flyer member to apply for a Qantas Money Home Loan. This website contains general advice only. This information has been prepared without considering your objectives, financial situation or needs. You should consider your circumstances before acting on this information.