Refinancing your home loan is one of the most impactful financial moves you can make — but many Australians put it off because they think it’s complicated, time-consuming or not worth the effort. The reality? For most borrowers, refinancing takes 4–6 weeks and can save thousands of dollars every year.
This guide walks you through every step of the process, from deciding whether it’s the right time to when the new loan settles.
Step 1: Understand Why You Want to Refinance
Before doing anything else, get clear on your goal. The reason matters because it shapes which loan product and lender is right for you.
Get a lower interest rate — the most common reason; even 0.5% can mean significant savings
Reduce monthly repayments — spreading the loan over a new term can free up cash flow
Access equity — to fund a renovation, investment property deposit, or other major expense
Consolidate debt — rolling higher-rate personal loans or credit cards into your mortgage
Switch loan features — adding an offset account, or removing features you no longer need
Exit a bad lender — poor service, limited products or restrictive terms
Not sure if refinancing is right for you yet? Read the 5 signs it’s time to refinance your mortgage before going further.
Step 2: Check Whether Refinancing Actually Makes Sense
Refinancing has costs — and it’s important to calculate whether the savings outweigh them. Key costs to factor in include:
| Cost | Typical Range |
|---|---|
| Discharge/exit fee (current lender) | $150 – $400 |
| Break costs (if on fixed rate) | Can be $0 to tens of thousands |
| Application/establishment fee (new lender) | $0 – $600 |
| Valuation fee | $0 – $300 (often waived) |
| Legal/settlement fee | $200 – $800 |
| LMI (if LVR increases above 80%) | Varies — often $0 if equity is strong |
| 📌 A general rule of thumb: if you can save 0.5% or more on your rate and plan to stay in the property for at least 2 more years, refinancing is likely worth it. |
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Step 3: Know Your Current Loan Position
Before approaching lenders, gather the key details about your existing loan:
Current interest rate (check your statement — not what you were originally offered)
Remaining loan balance
Current property value (use recent sales in your area as a guide)
Fixed or variable — and if fixed, when the term expires
Any features you use: offset account, redraw, etc.
Your LVR (Loan-to-Value Ratio) is critical. If your property has grown in value since you purchased it,
your LVR may have improved significantly — unlocking better rates and potentially avoiding LMI.
Use the calculator below to model what your repayments would look like on a new loan before you start comparing lenders.
📅 Repayment Calculator
Step 4: Research and Compare Your Options
With your current position clear, start comparing what’s available. Look at:
Advertised rate vs comparison rate — the comparison rate includes fees and gives a truer cost
Offset account availability — essential if you want to reduce interest with savings
Cashback offers — some lenders offer $2,000–$4,000 cashback to refinancers; factor this into your calculations
Repayment flexibility — can you make extra repayments? Is there a redraw facility?
Lender reputation — consider customer service, app functionality and speed of approval
If your fixed rate period is ending and you’re deciding whether to re-fix or go variable, read our guide on fixed vs variable rate home loans before approaching lenders. You can also run a quick Loan Check to see how your application might look before you apply.
| 💡 A mortgage broker has access to dozens of lenders and can present you with a shortlist of the most competitive options for your situation — saving you hours of research. |
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Step 5: Apply for the New Loan
Once you’ve selected a new loan, the application process begins. You’ll typically need:
2 most recent payslips (or 2 years of tax returns if self-employed)
Most recent 3–6 months of bank statements
Details of existing debts: credit cards, personal loans, HECS
Details of the existing home loan being refinanced
ID: driver’s licence and/or passport
Your new lender will conduct a credit assessment and order a property valuation. If approved, you’ll receive a loan offer to review and sign.
Step 6: Discharge Your Old Loan and Settle
Once your new loan is approved and signed, your new lender coordinates with your old lender to discharge (pay out) your existing mortgage. This process typically takes 2–4 weeks.
On settlement day, your new loan becomes active, your old loan is closed, and your mortgage is registered with the new lender. You’ll start making repayments to the new lender from this point.
After refinancing, check your Borrowing Power to understand how your new loan structure affects your financial position.
How a Mortgage Broker Can Simplify the Process
Refinancing through a broker rather than directly with a lender offers several advantages:
Access to a wide panel of lenders — not just the bank you already use
Your broker handles the paperwork and lender communication on your behalf
A good broker will model multiple scenarios and show you the true cost comparison
It’s free — brokers are paid by lenders, not by you
Frequently Asked Questions
There’s no legal limit on how often you can refinance. However, refinancing too frequently can affect your credit score and means repeatedly paying exit and establishment fees. Most financial advisors suggest reviewing your loan every 2–3 years.
Refinancing involves a credit inquiry, which can slightly reduce your credit score in the short term. However, if the new loan reduces your overall debt cost and you make repayments on time, the long-term impact on your credit profile is generally positive.
It’s more difficult but not impossible. Specialist lenders cater to borrowers with credit impairments. A broker can assess your situation and identify the best available options.
Yes — this is called a cash-out refinance or equity release. If your property has grown in value, you may be able to access that equity by increasing your loan amount. The released funds can be used for renovations, investment, or other purposes.
A rate review involves negotiating a lower rate with your existing lender without switching. It’s faster and involves no costs — but you’re limited to what your current lender can offer. A full refinance gives you access to the entire market.
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