Refinancing means switching your home loan to a different lender or product. Done right, it can save you thousands. This guide helps you decide if refinancing is right for you.
Reasons to Consider Refinancing
- Lower interest rate: The most common reason—rates change, and loyalty doesn't always pay
- Better features: Offset accounts, redraw facilities, flexible repayments
- Access equity: Tap into your home's increased value
- Consolidate debts: Roll high-interest debts into your mortgage
- Change loan type: Switch from fixed to variable or vice versa
How Much Could You Save?
The potential savings depend on your loan size and the rate difference:
| Loan Amount | Rate Reduction | Annual Saving |
|---|---|---|
| $500,000 | 0.50% | ~$2,500 |
| $500,000 | 1.00% | ~$5,000 |
| $750,000 | 0.50% | ~$3,750 |
Costs to Consider
- Discharge fee: $150-$400 from your current lender
- Government fees: ~$200 for mortgage registration
- Valuation fee: Often free, sometimes $200-$400
- Break costs: Can be significant if breaking a fixed rate
Warning: Fixed Rate Break Costs
If you're on a fixed rate, breaking early can cost thousands—sometimes tens of thousands. Always get a break cost quote before proceeding.
The Break-Even Point
Calculate how long it takes for savings to exceed costs:
Break-even months = Switching costs ÷ Monthly savings
If you plan to stay in your loan longer than the break-even point, refinancing makes sense.
The Refinancing Process
- Review your current loan: Know your rate, balance, and any break costs
- Compare options: We search 30+ lenders for better deals
- Apply for new loan: Similar to your original application
- Valuation: New lender values your property
- Settlement: New loan pays out old loan (2-4 weeks)
When NOT to Refinance
- You're about to apply for more credit (delays other applications)
- Your property value has dropped significantly
- You're planning to sell soon
- Break costs exceed potential savings
- Your financial situation has changed negatively
Next Steps
- Use our refinance calculator to estimate savings
- Book a free assessment to compare your options
