Refinancing your home can save you money, but be warned: it can also impact your credit score.
- Refinancing means applying for a new loan and giving permission to a lender to make a credit enquiry – which could (but not necessarily) cause your credit score to drop slightly
- Making several credit enquiries over a short space of time can have a negative impact on your credit score. If you try to refinance and are declined and then apply with another lender, your credit score could fall
- On the flipside, you could see your credit score improve after you start paying off your new home loan – especially if you’re able to make all your repayments on time
- Refinancing to consolidate your home loan can help you manage your repayments better, which can also have a positive impact on your credit score