Mortgage Refinancing: How It Works

• Savings on your interest cost

• Lower your monthly commitments

• Mortgage refinancing allows you to change the tenure of the loan as per your needs

With a refinanced mortgage, you can tweak the loan's tenure to meet your needs. If your income and financial capability improve, you can choose a shorter loan tenure and pay off the mortgage faster by making larger monthly payments.

You can consolidate debt, adjust loan terms, lower your monthly payments through refinancing, or even take some cash out of the equity in your house to pay bills or make improvements.

Let's analyse some of the causes for possible refinancing in more detail:

• Consolidate your debt

Consolidating your debts entails taking out a new loan to pay off two or more of your current loans. Your past debts are consolidated, so you no longer have to worry about paying back numerous loans with various interest rates and costs.

Perhaps the most alluring of all of its advantages is the financial relief that comes from drastically lowering monthly instalments. In general, debt consolidation can decrease your payback duration and help you save money on interest.

• Able to tackle any emergency situation with increased cash flow

The amount of money you must pay toward your mortgage each month in instalments is mostly influenced by the interest rate on your loan. That is the main reason why mortgage refinancing is popular. Depending on your goals, you can use the cash flow you get from refinancing your property for a variety of things.

This includes making the most of the current buyer's market and using the extra money to buy an investment property, investing in your own education, raising the value of your home through renovations, or saving for any emergency situations. You will be better equipped to handle any emergency circumstance with the extra cash flow that comes with refinancing your loan.

• Can unlock a better future for your child

As a borrower, you can do a cash-out refinance to access the equity you’ve built up. This money can be used for a variety of purposes such as saving up for your children's education.

Rumah ku, syurga ku. Browse our property financing solutions or contact us to discover the best mortgage refinancing plan for your house. 

This article is for informational purposes only and CIMB does not make any representation and warranty as to the accuracy, completeness and fairness of any information contained in this article. As this article is general in nature, it is not intended to address the circumstances of any particular individual or entity. You are advised to consult a financial advisor or investment professional before making any decisions based on the information contained in this article. CIMB assumes no liability for any consequences arising from your reliance on the information presented here.