All Topics / Finance / Equity Release and Refinance

Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of psrpropertypsrproperty
    Participant
    @psrproperty
    Join Date: 2020
    Post Count: 3

    Are Equity Release and Refinance the same thing?

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 284

    Good Day psproperty,

    So technically they are different in the sense refi is restructuring a loan.

    Equity release may be many terms or means to release the equity.

    From my understanding its more an overview of a way to release equity without selling as per the below structures

    -Reverse Mortage

    -partial sale

    -sell FV of property

    -Line of Credit (may not be deemed equity release, but similar)

     

    Wish you all the best!

    Kind regards

    Jaxon Avery

    Disclaimer: This is general information only & may not be right for your situation or circumstances.

     

     

    Jaxon | Jaxon Avery – Financial Adviser
    http://www.jpafinancialservices.com.au
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    JPA Financial Services Pty Ltd

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Are Equity Release and Refinance the same thing?

    nope

    Refinance = paying one loan out with another

    Equity release = borrowing against an existing property

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Philip-GreenPhilip-Green
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    @philip-green
    Join Date: 2020
    Post Count: 0

    I think this will help you more

     

    Let’s say that 10 years ago, when you first purchased your home, interest rates were 5% on your 30-year fixed-rate mortgage. Now, in 2020, you can get a mortgage at an interest rate of 3.5%. Those one-and-a-half points can potentially knock hundreds of dollars a month off your payment, and even more off the total cost of financing your home over the term of the loan. A refinance would be to your advantage in this case.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    The maximum fixed loan is generally 5 years in Australian

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Are Equity Release and Refinance the same thing?

    They’re two different things.

    Having said that – a refinance and equity release often happen at the same time.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Benny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi Philip Green,

    Let’s say that 10 years ago, when you first purchased your home, interest rates were 5% on your 30-year fixed-rate mortgage. Now, in 2020, you can get a mortgage at an interest rate of 3.5%. Those one-and-a-half points can potentially knock hundreds of dollars a month off your payment, and even more off the total cost of financing your home over the term of the loan.

    That WOULD be a good idea, except that the lender will have break costs on a Fixed Loan that is likely to cost you ALL of what you would save, and then some more.   So, before anyone goes “breaking” a Fixed Loan, ask for a payout figure first, then do your sums !!!

    Benny

     

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