The most common reason consumers choose to refinance is to gain better interest rates. However, make sure you tally up all the fees involved in switching loans to see if you are saving a enough to make the process worthwhile.

Refinancing can allow you to access the equity of your home to cover major costs such as school fees or a family holiday. It can also allow you to renovate your property which could in turn add to its value.

Refinancing is when you change your current home loan to a new one that satisfies your current financial situation. It can either be done internally (with the same lender) or externally (with a different lender).

Although exit fees were abolished in Australia in July 2011, fixed agreements made prior to this date may still incur an exit fee. Other fees to take into consideration include, but are not limited to, valuation, settlement and establishment fees, as well as paying the non-transferrable lender’s mortgage insurance again if you are borrowing less than 80 percent.

The amount varies for each individual as it is based on income and current financial situation. Using an online calculator can give you a ballpark amount, but for a more accurate figure, speak to a broker.

If you earn less from an investment property than it’s costing you, you’re said to be negatively geared. The motivation to be negatively geared is that it reduces your taxable income and you accept a short-term loss in the hope of a capital gain later.

Ongoing, as the owner of an investment property, you will need to pay council rates, water rates, insurance, body corporate fees, land tax, property management fees, repairs and maintenance costs.

The cost of having a professional manage your rental property is between seven and ten per cent of your total rental income each week. So, for a property with an average rental return of $550 per week, you would need to pay the agent between $38.50 and $55 per week, which amounts to between $2,002 and $2,860 per year. If you compare this to the time commitment and potential costs you could face if you were to represent yourself at the tribunal, this weekly management fee is marginal.

Along with the cost of your deposit, you need to account for the cost of building inspections, stamp duty, conveyancing fees and any legal costs.

Unlike a home loan, costs associated with an investment loan are tax deductible (eg interest, repairs, rates, depreciation, etc). However, be aware that any rental income will generally increase your taxable income. Another key difference is that any appreciation in the value of an investment property (capital gains) is taxed.