Home Loan Refinancing Guide 2026
Everything you need to know about refinancing your mortgage. Compare rates, understand costs, and find out if refinancing is right for you.
Should You Refinance Your Home Loan?
Refinancing means replacing your current mortgage with a new one, usually to get a better deal. Australians save an average of $2,000-$5,000 per year by refinancing to a lower rate.
When to Consider Refinancing
- Interest rates have dropped: If rates are lower than when you got your loan
- Your circumstances have improved: Better income or credit score may qualify you for better rates
- You want to access equity: For renovations, investments, or other purposes
- You're unhappy with your lender: Poor service, lack of features, or restrictive terms
- Your fixed rate is ending: Review your options before reverting to a higher variable rate
Refinancing Costs to Consider
- Discharge fee: $150-$400 to close your current loan
- Break costs: May apply if leaving a fixed rate early
- Application fees: Some lenders charge $0-$600
- Valuation fee: Usually $0-$300
- Settlement fees: Around $200-$500
Good news: Many lenders offer cashback of $2,000-$4,000+ to offset these costs.
How to Refinance
- Review your current loan: Know your rate, balance, and any exit fees
- Calculate potential savings: Use online calculators or speak to a broker
- Compare options: Don't just look at rates—consider features, fees, and flexibility
- Apply for the new loan: Your broker handles paperwork
- Settlement: The new lender pays off your old loan and the switch is complete
Refinancing Calculator Example
On a $500,000 loan over 25 years:
- 0.25% rate reduction: Saves ~$1,250/year
- 0.50% rate reduction: Saves ~$2,500/year
- 1.00% rate reduction: Saves ~$5,000/year