Why refinancing for a home loan top-up isn't always your best option


Brought to you by Futurerent.

Any property investor who has refinanced their home loan will agree that it’s a painful process. So painful that it only makes sense to do it if the numbers really stack in your favour. If you refinance your home loan to get a better deal, you’ll most likely be comparing interest rates to save money in the long term.

But if you’re a property investor refinancing to increase (or top up) your home loan, this isn’t necessarily going to be your best option, especially if you don’t need a huge amount of money. At Futurerent, we enable you to unlock up to $100,000 of your rental income, so you don’t have to get a new loan (because really, that’s what refinancing is).

Let’s run the numbers

When comparing refinancing and its alternatives, looking at interest rates alone can be misleading. This is because the repayment term is just as important. Banks love talking about the interest rates of refinancing but shy away from how long it takes to pay the entire loan off.

Confused? We’ll show you with real numbers.

Let’s say you need access to $25,000. You can choose to pay an interest rate of:

  1. 1) 5.1% per annum over 30 years – this is the RBA’s average investor home loan rate or

  2. 2) 6% per annum over 1.5 years – this is the fixed fee Futurerent charges over the shortest term.

Show me the money

Naturally, your eyes are drawn to the interest rate with the lower number. It can be tempting to bump that $25,000 onto your 30-year mortgage and pay it off along with the mortgage you’ve already got.

Let’s look at a second set of numbers, this time in dollar figures. Would you rather pay:

  1. 1) $24,346 or

  2. 2) $2,250?

It’s not hard to guess which one most people would choose.

Option 1) Pay $24,346

The first option is the amount of interest you’d need to pay by topping up your mortgage by $25,000 and allowing the interest to accumulate over 30 years, based on the rates in the first set of numbers. Note that we haven’t even included other refinancing costs, such as break costs, establishment fees and monthly account- keeping fees.

Option 2) Pay $2,250


The second option is your cost over 1.5 years if you access $25,000 of your rental income upfront using Futurerent. We only charge a single fee, so there’s nothing else you need to account for.


Avoid a lifetime of interest

On the surface, topping up your mortgage sounds like a set-and-forget approach, but that’s exactly what the banks want you to think. In that example, you’d be more than $22,000 worse off if you refinanced!

So whether you’re looking to use the funds to invest in your business, buy another property or do a renovation, it’s important to crunch the numbers before making any financial decisions. See how much you can save with Futurerent’s pricing comparison calculator or learn more about how upfront rent works.


Futurerent is a loan-free alternative to the banks, that gives residential property investors up to $100,000 of their rental income, paid upfront.

Futurerent gives residential property investors a faster and simpler solution for their investment capital and cashflow needs.

Unlike the banks, Futurerent is simple, fast & 100% built for property investors. Say hello to tomorrow’s rent today.

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