Refinancing 101: When and How to Refinance
Learn when refinancing makes sense, how much you could save, and the step-by-step process to switch lenders.
Refinancing your home loan means replacing your current mortgage with a new one, either with your existing lender or a different one. Australians refinance billions of dollars in home loans every month, seeking better rates, lower fees, or access to better features.
When Should You Refinance?
Refinancing isn't always the right move. Here are the key indicators that it might be time to switch:
Your rate is above market
If you're paying more than 0.5% above current market rates, you could save significantly by switching.
Your fixed rate is ending
When your fixed period expires, you'll revert to a variable rate that may be higher. It's the perfect time to shop around.
You want to access equity
If your property has increased in value, refinancing can let you access that equity for renovations, investments, or other purposes.
Your financial situation has improved
Higher income, better credit, or more equity can qualify you for better rates than when you first borrowed.
You need different features
Want an offset account, redraw facility, or the ability to split between fixed and variable? Refinancing can get you there.
How Much Could You Save?
Example Savings Calculation
Loan Amount
$500,000
Current Rate
6.5%
New Rate
5.8%
Monthly Saving
$230
Yearly Saving
$2,760
Based on 30-year loan term with principal and interest repayments
What Are the Costs?
Before refinancing, you need to weigh the potential savings against the costs involved:
Discharge fee
Fee from your current lender to close the loan
$150 - $400
Break costs (fixed loans)
Can be significant if you're breaking a fixed rate early
Varies
Application fee
Many lenders waive this for refinancers
$0 - $600
Valuation fee
Often waived or included by the new lender
$0 - $300
Settlement fee
Legal/conveyancing costs for the new loan
$200 - $400
Government fees
Mortgage registration and discharge fees
$150 - $250
Rule of thumb
If you can save 0.5% or more on your interest rate and plan to stay in the loan for at least 2 years, refinancing usually makes financial sense after accounting for costs.
The Refinancing Process
Review your current loan
Check your interest rate, remaining term, and any exit fees
Calculate potential savings
Use our comparison calculator to see if switching is worthwhile
Compare new loan options
We search 30+ lenders to find better deals for your situation
Submit your application
We prepare and lodge your application with the chosen lender
Valuation
The new lender values your property (often free for refinancers)
Approval and settlement
Once approved, we coordinate the switch between lenders
Common Refinancing Mistakes
❌ Only looking at the interest rate
✓ Compare fees, features, and total cost of the loan
❌ Forgetting about break costs
✓ Calculate fixed rate break costs before deciding
❌ Extending your loan term
✓ Keep the same end date to avoid paying more interest
❌ Not reading the fine print
✓ Understand offset limits, redraw conditions, and exit fees