Refinancing

The average loan term from any lender is normally 30 years with a few exceptions. If you've already been in your loan for a couple years, extending your new loan back to full term when refinancing can be a strategic way to reduce your minimum monthly repayments and improve your ongoing cashflow. If you're worried about paying more interest by extending your loan again, you are still able to make extra repayments to pay off your loan sooner (subject to certain loan features).

Principal & Interest vs Interest Only repayments. Both having their own advantages, its important to figure out whats more suitable for your circumstance. P&I repayments go towards paying off your home loan as well as an interest portion, whereas with IO repayments, you only pay interest on the loan and your loan amount doesn't reduce. IO monthly repayments are generally lower than P&I repayments which can help in the interim to improve your monthly cashflow.

Fixing your rate allows you to budget for the future as you'll know exactly what your repayments will be moving forward until the fixed period ends. However, you may end up paying more than necessary if the variable rate is lower. Of course, the fluctuation in variable rates is hard to predict so you'll need to take into account the amount of risk you are willing to take on at the time of applying for the loan. Keep in mind that you can come out of a fixed rate, but you'll be charged a break fee.

An offset and a redraw facility both have very similar characteristics and essentially achieve the same result but with a few key differences. A redraw facility is the accumulation of any extra repayments you make to your home loan which reduces the loan amount that interest is calculated on. You'll need to apply to retrieve your redraw funds. An offset account is a separate account with easily accessible funds that offsets your home loan and interest is only calculated on the difference.