Refinancing your home loan means switching to a new loan — either with your existing lender or a new one — to get a better rate, reduce fees, or access equity. With rates having fallen since the RBA cuts, millions of Australians are asking whether now is the right time to refinance.
How Much Can Refinancing Save You?
When Refinancing Makes Sense
- Your rate is 0.5%+ above the best available — even a 0.5% reduction on $600k saves ~$150/month
- You’ve built 20%+ equity — you may qualify for better rates than when you first borrowed
- Your fixed rate is expiring — when fixed periods end, you often revert to a high variable rate
- You want to consolidate debt — rolling high-rate personal loans into your mortgage can reduce overall interest
- You need to access equity — for renovations, investment, or other purposes
Refinancing Costs — What to Factor In
| Cost | Typical Amount | Notes |
|---|---|---|
| Discharge fee (old lender) | $150–$500 | Paid to your current lender to close the loan |
| Application/settlement fee (new lender) | $0–$600 | Many lenders waive this or offer cashback |
| Lenders Mortgage Insurance (if LVR >80%) | $5,000–$20,000+ | Avoid if possible — LMI doesn’t transfer |
| Break cost (fixed loans only) | $0–$30,000+ | Ask your lender for an exact quote before refinancing |
| Government fees (stamp duty on mortgage) | Varies by state | Usually small for refinancing vs new purchase |
The Break-Even Calculation
To know if refinancing is worth it, divide your total refinancing costs by your monthly saving:
Example: $1,500 costs ÷ $277/month saving = 5.4 months to break even
If you plan to stay in the loan longer than the break-even period, refinancing makes financial sense.
Cashback Refinance Offers
Many lenders offer cashback deals of $2,000–$4,000 for eligible refinancers. These are worth factoring in but shouldn’t be the primary reason to refinance — a lower rate over 5+ years is worth far more than a one-time cashback payment.
How to Refinance — Step by Step
- Check your current rate against the best available (use our Best Home Loans page)
- Calculate break-even — factor in all exit and entry costs
- Check your LVR — ensure you have sufficient equity to avoid LMI
- Apply to new lender or use a broker — a broker can access 20+ lenders at once
- Discharge existing loan — new lender typically handles this settlement
Calculate Your Current Repayments
See exactly what you’re paying now vs what you could be paying.
Disclaimer: General information only. Not financial advice. Always consult a licensed professional before making financial decisions.