Refinancing Your Home Loan: When and How

Refinancing means replacing your existing home loan with a new one — either with the same lender or a different one. It's one of the most effective ways to reduce your interest costs and free up cash.

When Should You Consider Refinancing?

1. Your Rate Is No Longer Competitive

If you've had your loan for more than 2 years, chances are there are better rates available. Lenders often reserve their best rates for new customers, so existing borrowers can end up paying a "loyalty tax."

2. Your Circumstances Have Changed

A pay rise, paid-off debts, or increased property value could qualify you for a better rate or product that wasn't available when you first borrowed.

3. You Want to Access Equity

If your property has increased in value, refinancing allows you to access that equity for renovations, investments, or other purposes.

4. You Want Better Features

Features like offset accounts, redraw facilities, or the ability to make extra repayments can save you significant money over the life of your loan.

How Refinancing Works

1. Review your current loan — Check your interest rate, features, and any exit fees
2. Compare alternatives — A mortgage broker compares options across 30+ lenders
3. Apply for the new loan — The broker handles the paperwork and application
4. Settlement — Your new lender pays out the old loan. The switch is seamless

Costs to Consider

• Discharge fee — Your existing lender may charge a fee to close your loan (usually $150–$400)
• Break costs — If you're on a fixed rate, breaking early can be expensive
• Application fees — Some new lenders charge establishment fees, though many waive these
• Valuation costs — The new lender may require a property valuation

Tip: Even with these costs, switching to a lower rate can save you tens of thousands over the life of your loan. A broker can calculate whether the savings outweigh the costs.

How Much Could You Save?

On a $500,000 loan, even a 0.5% rate reduction can save over $50,000 in interest over 25 years. Use our Loan Comparison Calculator to see the difference.