Eighteen months ago, Sydneysider Tran Nguyen drew up a wish list for herself and her home. Top of the list was making the most of low interest rates. She explains, “I had a firm belief that home loan rates wouldn’t fall further so I wanted to lock in while they were still low.”

Tran had other goals too. “I’ve owned my home since 2010 and after nearly seven years it was due for some renovations.”

Tran checked out the fixed rates offered through her current lender but she wasn’t impressed. Convinced she could score a better deal, she turned to her mortgage broker.

“My broker recommended a loan with a different lender that had a very good 3-year fixed rate,” she says. “I was really happy with the rate but I also wanted offset and redraw. My old loan didn’t have any bells and whistles, and it was important to me to have these features.”

Tran’s broker explained that by splitting her home loan between fixed and variable rates she could achieve both goals – the certainty of a fixed rate while still having access to the loan features she wanted. “It was the ideal solution,” says Tran.

Using home equity for renovations

Refinancing also let Tran hit another target – renovating her home. “Refinancing let me use my home equity to pay for the improvements.”

As it turned out, Tran had a fair bit of home equity up her sleeve. “The new lender sent a valuer round to my place, and I was pleasantly surprised to see how much equity I had,” recalls Tran.

The process of refinancing turned out to be remarkably easy. ”My broker did most of the work,” admits Tran. “I just provided some paperwork like pay slips, and from there it was a simple swap of the old loan for the new one.”

Loyalty doesn’t always pay

Tran says refinancing her home loan took just four weeks from start to finish. Looking back she feels it’s the best decision she’s made in years. “I locked in at a great rate, and I’m using my offset account to save on interest. The renovations are complete, and my home is looking really good.”

Tran has already set a date to review her home loan in another 18 months when the fixed rate portion comes up for renewal.

“I’m certainly open to refinancing at that stage,” she says. “If there’s one thing I learned from the whole experience it’s that being loyal to one particular lender doesn’t necessarily get you a better rate.”