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What Does Refinance With Cash Out Mean?

June 12, 2023

Refinancing with cash out is a popular option for many Australians looking to make the most of their home loan. It involves taking out a new loan to replace an existing one and taking out extra money at the same time. This extra money is known as a ‘cash out’.

The cash out can be used for a variety of purposes, such as paying off debts, making home improvements, or investing in a business. It is important to note that the cash out is not a loan in itself, but rather an additional amount of money that is added to the loan.

When considering a refinance with cash out, it is important to understand the implications of the loan. The most important factor to consider is the interest rate. Refinancing with cash out typically involves a higher interest rate than a standard home loan. This is because the lender is taking on more risk by providing a larger loan amount.


It is also important to consider the fees associated with the loan. These can include a loan origination fee, an appraisal fee, and other closing costs. It is important to understand all of the fees associated with the loan before signing any paperwork.

When refinancing with cash out, it is also important to consider the impact on your credit score. Taking out a larger loan can have a negative impact on your credit score, so it is important to understand the implications of the loan before signing any paperwork.

Another important factor to consider when refinancing with cash out is the repayment period. Typically, the loan will have a longer repayment period than a standard home loan. This means that the borrower will be paying more interest over the life of the loan.

Finally, it is important to consider the tax implications of the loan. Depending on the purpose of the loan, the cash out may be subject to capital gains tax. It is important to understand the tax implications of the loan before signing any paperwork.

When considering a refinance with cash out, it is important to seek the advice of a qualified mortgage broker. A mortgage broker can help you understand the implications of the loan and help you find the best loan for your needs. They can also provide advice on the best way to structure the loan and help you understand the tax implications of the loan.


At Logan Home Loans, we understand that refinancing with cash out can be a complex process. Our experienced mortgage brokers are here to help you make the most of your home loan. We can help you understand the implications of the loan and help you find the best loan for your needs. We can also provide advice on the best way to structure the loan and help you understand the tax implications of the loan.


If you have any questions about refinancing with cash out, our team at Logan Home Loans would love to help. We are committed to providing our clients with the best advice and service possible. Contact us today to learn more about how we can help you make the most of your home loan.

February 2024 Cash Rate

February 6, 2024
Property and cash rate predictions for 2024

Banks “stand ready to help” people with home loan problems

January 3, 2024
The Australian Banking Association (ABA) has launched a campaign encouraging borrowers struggling with loan repayments to seek help, in a valuable reminder there are options available if you're finding it hard to keep up with your mortgage. Your bank may be able to: Reduce your home loan repayments. Pause your repayments temporarily. Switch your repayments from principal and interest to interest-only temporarily. Increase the length of your loan (thereby reducing the repayments). ABA CEO Anna Bligh said banks understood many borrowers were facing challenging circumstances. “Banks stood by their customers during the COVID-19 pandemic, deferring payments for people who for the first time in their lives found themselves unable to pay. Banks stand ready to help people again now,” she said. “People who are finding their finances are stretched should not feel they have no options and they have to do it on their own. Banks have dedicated, highly experienced teams ready to help.” As your broker, I'm also here to help. You're welcome to contact me for advice; I can then speak to and negotiate with your lender on your behalf. The key thing is to move fast, because the further you get ahead of the problem, the more flexible and helpful banks tend to be.

Is 2024 the year to buy property?

January 2, 2024
The Reserve Bank of Australia has rounded out 2023 with the decision to hold the nation’s cash rate at 4.35%. 2023 hasn’t been an easy year for homeowners or ambitious first-home buyers. The cash rate increased from 3.10% to 4.35% over the course of eleven months in the RBA’s bid to bring inflation back within its target range. According to data from the RBA, the average home loan rate at the start of the year (for existing home loans) was 5.46% p.a.. If the lender passed on interest rates in line with the increased cash rate, that would make the interest rate 6.71% p.a.. Based on the average Australian mortgage of $599,000 on a 25-year term paying principal and interest, that equals an additional $459 per month simply to service the mortgage (from $3,661 to $4,123 per month). For first-home buyers, the average time to save for a deposit has increased to 14 years, according to a recent paper by the Australian Housing and Urban Research Institute Limited, with the national ratio of median house price to median income now sitting at 8.5. That is the hard reality many Australians are currently facing. So the question is, what will 2024 bring? Short of looking into an Australian-economy crystal ball, we can’t predict exactly what will happen with inflation, the cash rate and therefore interest rates. However, there are a couple of factors to consider. The RBA will meet only eight times in 2024 to determine whether to move the cash rate, down from the eleven in 2023. This means potentially less movements through the year. The next cash rate announcement will be 6 February. Economists from the Big Four predict the cash rate is at, or near, its peak. Some predict at least one more rate hike in 2024 and rate cuts likely not happening until at least December. Despite predictions of a decline in house prices in 2023, they have actually continued to increase in most areas around the country. This could be good news for refinancers as we enter 2024, as they could find their equity has grown. Why 2024 could be a good time for first-home buyers Despite some potential challenges, 2024 could actually be a good time to get into the housing market. Here’s why. Savings interest rates are up - the pro of the cash rate going up is that savings interest rates also tend to go up. This can help expedite saving for a deposit. It could be cheaper to be a homeowner - according to PropTrack data, it is now cheaper to buy an apartment rather than renting one in most capital cities (based over a ten-year period with a 20% deposit). In fact, a third of properties nationally are cheaper to buy than rent. The First Home Guarantee has expanded - in 2023 the eligibility criteria for the First Home Guarantee, Family Home Guarantee and Regional First Home Buyer Guarantee was expanded, enabling eligible buyers to get into the market sooner. This means if you have a 5% deposit (or 2% if you are a single parent or guardian), you may be able to use one of the schemes to purchase property without paying lenders mortgage insurance. ‘Help to buy’ scheme to be introduced - the federal government has announced plans to rollout a new scheme that will help up to 40,000 eligible buyers with as little as a 2% deposit get into the housing market with lower repayments. If 2024 is the year you want to purchase your first home, it is a good idea to speak with your broker to find out how much you may be able to borrow and set a plan in place to achieve your goal.
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