Refinancing means replacing your current home loan with a new one, either with a different lender or a new deal with your existing one. Done well, it can lower your repayments, cut years off your loan or free up equity. Done for the wrong reasons, the costs can wipe out the savings.
Signs it’s worth a look
- Your fixed rate is ending and you’re about to roll onto a higher variable rate
- You haven’t reviewed your rate in a year or two (new customers are often offered sharper rates than existing ones)
- Your property has gone up in value, so you now owe less than 80% of it
- You want an offset account, extra repayments or other features your loan doesn’t have
- You want to consolidate higher-interest debts, or release equity for renovations or investing
The costs to check first
- Break costs: if you’re on a fixed rate, leaving early can trigger a fee that depends on how rates have moved. Ask your lender for a figure in writing.
- Discharge fee: your current lender usually charges a fee to close the loan.
- New loan costs: application, valuation or settlement fees with the new lender (some waive them).
- Lenders mortgage insurance (LMI): if you borrow more than 80% of the property value, you may pay LMI again, even if you paid it on your first loan.
- Government fees: Landgate charges to register the mortgage change.
Watch the loan term
A lower rate can still cost you more if you reset a 25-year-remaining loan back to 30 years. Keep your repayments the same, or choose a term that matches what’s left, and you’ll pay the loan off sooner.
Compare the comparison rate
The advertised rate isn’t the whole story. The comparison rate includes most fees and charges, so use it to compare loans of the same type. Comparison rates are true only for the examples given and may not include all fees.
How the switch works
- A review of your current loan, goals and finances
- Your broker compares lenders and recommends a loan that’s in your best interests
- Application, valuation and approval
- Your new lender pays out the old loan on settlement day, usually through PEXA
- You set up your new repayments and any offset account
When refinancing might not suit you
- Your fixed rate break cost is higher than what you’d save
- You’re planning to sell soon
- Your income or employment has recently changed, which can make approval harder
- You’d end up with a longer loan and more interest overall
General information only, written on 11 October 2026. It doesn't take your personal circumstances into account. Rates, grants, tax rules and concessions change, so speak with us before making a decision.
