Key takeaways
- Refinancing can lower your rate, change loan features, or unlock equity — but it’s not always worth it.
- Banks reserve their sharpest rates for new customers, so loyalty often quietly costs you.
- Watch the term reset — a new 30-year loan can add years of interest if you’re not careful.
- Factor in switching costs; the saving has to outweigh them to make the move worthwhile.
Refinancing simply means replacing your current home loan with a new one — often with a different lender. Done at the right time, it can save you thousands. Done blindly, it can cost you. The trick is knowing which is which.
Why people refinance
- A lower interest rate. The most common reason — and often the most valuable, since even a small rate drop on a large balance adds up fast.
- Better features. An offset account, redraw, or the ability to make extra repayments.
- Accessing equity. Tapping the value you’ve built for renovations, an investment, or to consolidate other debt.
- Switching loan type. Moving between fixed and variable, or splitting the two.
- A fixed term ending. Avoiding the high “revert” rate many loans roll onto.
The “loyalty tax” nobody mentions
Here’s an uncomfortable truth: lenders compete hardest for new business. The sharp rate that won you over a few years ago may now be well above what the same bank offers new customers — and they rarely call to tell you. Reviewing your loan every couple of years is how you stop quietly overpaying.
On a $500,000 loan, dropping your rate by just 0.50% saves roughly $150 a month — around $9,000 over five years. Try our savings estimate on the home page to see what a sharper rate could be worth to you.
The catch: watch the term reset
When you refinance, the new loan often defaults to a fresh 30-year term. If you were 6 years into your old loan, quietly stretching back to 30 years lowers your monthly payment — but can add years of interest overall. The fix is simple: ask to set the new loan’s term to match your existing payoff timeline. It’s the kind of detail that’s easy to miss on your own.
What does refinancing cost?
Refinancing isn’t free, though costs are often modest:
- Discharge fee from your current lender
- Government mortgage registration fees
- Possible application or valuation fees with the new lender (often waived)
- Break costs if you exit a fixed-rate loan early — these can be significant, so always check first
The question is always the same: does the saving comfortably outweigh the cost of switching? If it doesn’t, we’ll tell you to stay put.
Is it worth it for you?
Refinancing tends to make sense when your current rate is noticeably above market, when you want features your loan doesn’t offer, when you need to access equity, or when a fixed term is ending. It tends not to be worth it when the saving is tiny, when hefty break costs apply, or when you’re about to sell. The only way to know for sure is to run your actual numbers.
See if refinancing is worth it — free
Book a free Game Plan Call and we’ll compare your current loan against 40+ lenders, factor in switching costs, and tell you honestly whether it’s worth moving — or whether you’re better off where you are.
Book your free game plan callFrequently asked questions
How much does it cost to refinance a home loan?
Often a few hundred to a couple of thousand dollars in discharge and registration fees, sometimes more if break costs apply on a fixed loan. Many lenders waive their own application and valuation fees. The saving should outweigh these costs.
Will refinancing hurt my credit score?
A refinance application involves a credit enquiry, which can have a small, temporary effect. An initial conversation comparing your options does not. We’ll always explain the steps before anything is lodged.
Does refinancing reset my loan to 30 years?
It can by default, but you can request a shorter term to match your existing payoff timeline so you don’t add unnecessary interest. We make sure this is set up correctly.
This guide is general information only and does not take your personal circumstances into account. It is not financial or credit advice. Government schemes, lender policies and rates change over time and eligibility criteria apply. Speak with us for advice tailored to your situation.