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People can refinance when rates come down but who knows when that will be. The cost of the refinance can vary based upon the equity in your home and a few other

People can refinance when rates come down but who knows when that will be. The cost of the refinance can vary based upon the equity in your home and a few other factors. One of the most common things people do when they refinance at a lower rate is take all of the equity they can out of their home in order for home improvements or other such things. Debt consolidation into your mortgage is also a thing that people do. This is one of the reasons why you see the refinance fee being so high is because they're not simply refinancing the remaining amount to get a lower interest rate they're taking a reappraisal on the house so they can get an overall larger loan at a lower rate.

ggm 2y ago
See, this is a huge difference with life here. You can refinance in Australia for the cost of drawing up the loan docs. Not a % of the life of the mortgage left and it's size. The cost of doing paperwork is a constant mostly. The penalty for a fixed interest buy out is there, but it's nothing like 30 years penalty. I guess if we had a 30 year fix the penalty would be commensurate. "appraisal" doesn't exist here either, as it does in the US. it's different.
- elmerfud 2y ago
  So maybe I didn't communicate this correctly. If you're simply refinancing as in getting another loan at a lower interest rate for the remaining principle of your current loan that's not very expensive. Unfortunately that's not what most people do. When they refinance a house they want to get it appraised for its current market value and get a new loan at the current market value for another 30 years at the lower rate. This gives them cash to consolidate other debts or do home improvements or all kinds of other things. That kind of refinancing is very common here in the USA and it is considerably more expensive. It is effectively all of the loan origination costs you get when you're buying the house.

ggm 2y ago

See, this is a huge difference with life here. You can refinance in Australia for the cost of drawing up the loan docs. Not a % of the life of the mortgage left and it's size. The cost of doing paperwork is a constant mostly. The penalty for a fixed interest buy out is there, but it's nothing like 30 years penalty. I guess if we had a 30 year fix the penalty would be commensurate. "appraisal" doesn't exist here either, as it does in the US. it's different.

elmerfud 2y ago
So maybe I didn't communicate this correctly. If you're simply refinancing as in getting another loan at a lower interest rate for the remaining principle of your current loan that's not very expensive. Unfortunately that's not what most people do. When they refinance a house they want to get it appraised for its current market value and get a new loan at the current market value for another 30 years at the lower rate. This gives them cash to consolidate other debts or do home improvements or all kinds of other things. That kind of refinancing is very common here in the USA and it is considerably more expensive. It is effectively all of the loan origination costs you get when you're buying the house.