Key takeaways
- The key number is the gap between your rate and the rates lenders offer new customers like you.
- Rate changes from the Reserve Bank flow to most variable loans, so a better margin keeps paying off whatever happens next.
- Switching costs, break costs and LMI can make a refinance not worth it. Add them up first.
- If you're unsure, ask your lender for a rate review. It costs nothing and doesn't affect your credit file.
Thinking about switching? See how our free refinance review works.
Should you wait for rates to fall?
Waiting for the rate cycle rarely helps on its own. When the cash rate moves, lenders usually pass the change to variable loans across the board, including yours. What refinancing changes is your position relative to the market. If you're paying well above what new borrowers pay, that gap stays whether rates rise or fall.
A quick test
- Check your current rate. It's on your statement or online banking.
- Compare with new-customer rates for a similar loan size and loan-to-value ratio.
- Estimate the saving. Use the refinance savings calculator.
- Subtract switching costs: discharge and registration fees, any break cost and LMI if your LVR is above 80%.
- Consider how long you'll keep the loan. If you're selling in a year, the saving may not cover the costs.
When now is usually a good time
- Your fixed rate ends in the next few months.
- Your property has grown in value, improving your LVR and your pricing tier.
- Your income has improved or debts have fallen, so you have more lender choice.
- You need to restructure, consolidate debt or release equity anyway.
When waiting may be better
- You're in a fixed term with a large break cost.
- Your LVR is just above 80%, and a little more paid down or a higher valuation would avoid LMI.
- Your income has dropped or changed recently, which may limit lender options until it settles.
- You're about to sell or buy, when the loan will change anyway.
More detail in when refinancing is the wrong move.
Start with a review
A rate review costs nothing and doesn't touch your credit file. It tells you the size of the gap, the costs involved and whether your current lender will move.
Get a free rate review
We'll compare your loan against 40+ lenders, include the switching costs and tell you honestly whether now is the time.
Book your free game plan callGeorge Karpathakis, Co-Founder & DirectorYour enquiry comes straight to our team. We usually reply within one business day.
Frequently asked questions
Does a rate review affect my credit score?
No. Only a formal application adds an enquiry, and we only lodge with your okay.
How often should I review my home loan?
Every year or two, and whenever a fixed term ends or your circumstances change.
What if my lender offers to match?
Often that's the easiest outcome. You keep the loan and get the saving without switching.
The 7 things every lender checks before they say yes
A one-page checklist to get your application lender-ready. Free and instant.
This guide is general information only and does not take your personal circumstances into account. It is not financial, credit, tax or legal advice. Examples are illustrative only. Government schemes, lender policies and rates change over time and eligibility criteria apply. Speak with us for advice tailored to your situation. LendQuest Pty Ltd is a credit representative (555514) of BLSSA Pty Ltd, Australian Credit Licence 391237.