Refinancing your home loan: the complete Australian guide

When refinancing actually makes sense

There is no fixed rule that says refinance every two years. What matters is the gap between your current rate and what you'd qualify for today, the size of your loan, and how long you plan to keep the property.

As a rough guide, on a $600,000 loan a 0.50% rate reduction saves roughly $180 a month and around $60,000 in interest over a 30-year term. On a $300,000 loan the same rate cut is worth about half that — which is why switching costs matter more on smaller balances.

• Your rate is more than 0.30–0.50% above comparable new-customer pricing
• A fixed rate is rolling off onto a higher revert rate
• You've built equity and want to drop below 80% LVR to remove LMI pricing
• You want to release equity for renovations, a deposit or landscaping
• You're consolidating high-interest personal or card debt into the mortgage
• You need features your current loan doesn't have — offset, redraw, splits

What refinancing costs

Switching is rarely free, but the costs are usually modest compared with the savings. Expect a discharge fee from your outgoing lender (typically $150–$400), state land title fees for the discharge and new mortgage registration, and sometimes an application or valuation fee with the new lender — though these are often waived.

Two costs can be much larger: break costs on a fixed loan, and LMI if you're refinancing above 80% LVR (LMI is not transferable between lenders). Both need to be checked before you commit.

The refinance process, step by step

• Establish your position — current rate, balance, property value and LVR
• Model the savings with the refinance calculator before applying anywhere
• Check serviceability at the assessment rate (usually your new rate + ~3%)
• Gather documents — payslips, tax returns if self-employed, loan statements, ID
• Submit, valuation, then formal approval (typically 1–3 weeks)
• Settlement — the new lender pays out the old loan, usually 2–4 weeks after approval

The mistakes we see most

• Resetting to a fresh 30-year term and paying more interest despite a lower rate
• Chasing a cashback offer attached to an uncompetitive ongoing rate
• Refinancing with recent late payments on file, which limits lender choice
• Consolidating short-term debt over 30 years without a plan to pay it down faster
• Forgetting to re-open and re-fund the offset account after settlement