Start with the current loan
Collect the current balance, rate, repayment schedule, remaining term and any security or guarantees. Ask for a payout quote that includes charges and its expiry date. A statement balance may not be the amount required to settle the loan.
Clarify the reason for refinancing: reducing costs, changing repayment frequency, releasing security or consolidating facilities. Different goals require different comparisons.
Smaller repayments are not the same as savings
Extending the term may reduce regular repayments but increase the total interest paid. Compare the remaining cost of the existing facility with the full cost of the proposed replacement, including fees and any final payment.
If several debts are consolidated, consider whether short-lived expenses will be repaid over a much longer period. Also check whether previously unsecured obligations would become secured.
Before accepting a replacement facility
- Confirm payout and discharge requirements
- Account for application, valuation and establishment costs
- Review security and personal guarantee changes
- Check restrictions on extra repayments
- Make sure settlement pays out the intended debts
What to prepare
- Existing loan agreements and statements
- Current payout figures
- A list of all switching costs
- The objective of refinancing
Common questions
Does a lower interest rate always make refinancing worthwhile?
No. Fees, the remaining term, a longer replacement term and other conditions can change the total outcome.
Can I use the Atlas calculator to compare?
You can model indicative repayments using your own assumptions. The calculator cannot replace the actual payout figures and facility documents.
General information only. Product terms and availability vary. Check the actual proposal and obtain advice appropriate to your circumstances.