Bryan is four years into a 30-year mortgage. It’s an owner-occupier, principal and interest loan that started with a low 3-year fixed rate. However, the fixed-rate period has finished, and the current rate is much higher, at 4.34%. Bryan initially borrowed $700,000 and has repaid $120,000 so far.
After making six years of repayments on an $800,000 mortgage, Leah decides she wants more out of her loan. She has a package mortgage with her bank and has bundled her mortgage with a credit card and 
Arabella wants to invest in property. She has almost paid off her mortgage and has $750,000 in equity. Because Arabella doesn’t have much debt to repay on her mortgage, she can easily switch to a line of credit loan. Arabella can then access cash as a deposit on a small investment property, which can be a risky investment strategy if she borrows too much money.
🔥 Hot tip: Save more by refinancing your mortgage but keeping repayments the same
Refinancing to a mortgage with a lower rate saves you money every month, because your repayments are lower. However, you can save yourself even more money in the long run by switching to a lower rate and keeping your repayments the same as they were before.
This way, you’re making extra repayments every month because you’re paying off slightly more than you need. So you’re paying the same as before, but it’s paying off your principal faster.
If your new mortgage has an offset account, you can simply save the extra money there. In this way, it functions just like an additional repayment.
