The Complete Guide to Refinancing Your Home Loan
Discover how refinancing can save you thousands, unlock equity, and put you in control of your financial future.
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What Does Refinancing Mean?
Refinancing is the process of replacing your existing home loan with a new one—either with your current lender or by switching to a different bank. Think of it as upgrading your mortgage to better suit your current financial situation and goals.
Just as you'd shop around for the best deal when buying a car or choosing a phone plan, refinancing allows you to take advantage of better interest rates, improved loan features, or access the equity you've built up in your home.
Why Refinance Your Home Loan?
Here are the most common and compelling reasons to consider refinancing
Secure a Lower Interest Rate
Even a small reduction in your interest rate can translate to massive savings. A 0.5% rate drop on a $500,000 loan could save you over $18,000 across the loan term.
💰 Real Example: Reducing your rate from 6.5% to 6.0% on a $500K loan saves approximately $340/month
Unlock Your Home Equity
As your property value increases and you pay down your mortgage, you build equity. Refinancing allows you to access this wealth for renovations, investments, or other major expenses.
🏠 Common Uses: Home renovations (85% ROI), investment properties, debt consolidation, or business ventures
Consolidate High-Interest Debt
Roll multiple debts—credit cards, personal loans, car loans—into your mortgage. With significantly lower interest rates, you'll simplify payments and reduce overall interest costs.
📊 Impact: Moving $30K credit card debt (20% interest) to mortgage (6% interest) saves $4,200/year
Access Better Loan Features
Modern home loans offer powerful features like offset accounts, redraw facilities, and flexible repayment options that weren't available when you first borrowed.
⚡ Benefits: Offset accounts can save $15K+ in interest, redraw gives flexibility, split rates provide security
The Refinancing Process
Follow these steps to successfully refinance your home loan
Review Your Current Situation
Start by gathering information about your existing loan—current interest rate, remaining balance, monthly repayments, and any fees or penalties. Check your credit score and assess your financial goals.
📋 Checklist: Current rate, loan balance, monthly repayments, exit fees, credit score
Compare Your Options
Use our comparison tool to evaluate loans from multiple lenders. Look beyond just interest rates—consider ongoing fees, features, and flexibility. Calculate potential savings using our refinancing calculator.
💡 Pro Tip: Compare total cost over the loan term, not just monthly repayments
Submit Your Application
Once you've chosen a new lender, submit your application with all required documents. This typically includes ID, payslips, bank statements, and details about your current loan and property.
⏱️ Timeline: Applications typically take 3-5 business days to assess
Property Valuation & Approval
The new lender will arrange a property valuation to confirm your home's current market value. This determines how much equity you have and affects your loan-to-value ratio (LVR).
🏡 Important: Higher equity (lower LVR) often means better rates and terms
Settlement & Discharge
Once approved, your new lender pays out your existing loan at settlement. Your old loan is discharged, and your new loan becomes active. You'll start making repayments to your new lender.
🎉 Success: Most refinances settle within 2-3 weeks of approval
Understanding Refinancing Costs
While refinancing can save you money, it's important to understand the upfront costs involved to ensure it makes financial sense.
Common Refinancing Costs:
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•$150–$400Discharge Fee: Paid to your current lender to close your existing loan.
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•$0–$600Application Fee: New lender application fee — sometimes waived for refinancers.
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•$200–$400Valuation Fee: Property valuation arranged by the new lender.
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•VariesGovernment Charges: Mortgage registration and transfer fees — varies by state/territory.
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•$300–$800Legal Fees: Optional solicitor or conveyancer fees for reviewing loan documents.
Calculate Your Break-Even:
To determine if refinancing is worthwhile, calculate how long it takes for your monthly savings to exceed the upfront costs.
Example Calculation:
Total costs: $2,000
Monthly savings: $300
Break-even: 6.7 months
After this point, every month saves you money!
Ready to Start Saving?
Our mortgage specialists can help you find the perfect refinancing solution. Get a personalised comparison and see how much you could save.