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Q: What does it mean to ‘refinance my home’ and how does it work?

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A: It means taking out a new home loan for the difference in value between your property’s original price and its current estimated value.

This extra money can then be withdrawn to pay off more expensive debt, like credit cards or personal loans, or be kept as equity in the bond. One of the main benefits of refinancing is the opportunity to secure a better interest rate than on your original bond. This can reduce monthly repayments (assuming the equity is not withdrawn), making it a valuable tool for homeowners struggling with cash flow. But you will have to cover refinancing costs, including bond registration fees, legal costs, VAT and deeds office levies. Your bond originator can help you assess whether the short-term costs are worth the potential benefits of refinancing. – Leonard Kondowe, national admin hub manager for Rawson Finance

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