Refinancing is the process of obtaining a new loan to pay off an existing loan, usually along with the goal of obtaining a more favourable interest rate, lower monthly payments or more favourable loan terms.

By refinancing, a borrower can take advantage of lower interest rates, change the loan term, or switch from a variable-rate loan to a fixed-rate loan. Refinancing can also be used to access the equity in a property or to consolidate multiple loans into one loan with a lower monthly payment.

It is important to carefully consider the costs involved in refinancing, such as application fees, break fees on existing loans, and legal fees, as well as the impact of refinancing on the overall financial situation.

Why do I need Refinancing?

Lower interest rate

Refinancing to a lower interest rate can reduce the monthly loan payment and save money over the life of the loan.

Changes in financial situation

If a borrower's financial situation changes, such as a decrease in income or an increase in expenses, refinancing may be an option to adjust the loan terms and repayments.

Shorter loan term

Refinancing to a shorter loan term can help to pay off the loan faster, saving money on interest over time.

Switch from variable rate to fixed rate

Refinancing can be used to switch from a variable-rate loan to a fixed-rate loan, providing stability and predictability in monthly payments.

Cash-out refinance

Refinancing can be used to extract equity from a property, providing access to cash for home improvements, debt consolidation, or other expenses.

Consolidate debt

Refinancing can be used to consolidate multiple loans into one loan with a lower monthly payment, making it easier to manage debt and improve the overall financial situation.

Important information and disclaimer

  • Any advice on this publication is of a general nature only and has not been tailored to your specific circumstances. Before taking action on this information, please seek your personal advice. Past performance is not a reliable guide for future returns. The information on this page reflects our understanding of the existing legislation, standards, etc.

    In some cases, the information has been provided to us by third parties. While the information is believed to be accurate and reliable, but this is not guaranteed in any way.

  • Neither AIFP nor its responsible persons or employees give any warranty of accuracy, nor accept any responsibility for errors or omissions in the information provided on this page.