Get the Finder app 🥳

Track your credit score


Refinancing after retirement

Refinancing your home loan after you retire could save you money, but there are risks you should be aware of before you start shopping around.


Fact checked

We’re committed to our readers and editorial independence. We don’t compare all products in the market and may receive compensation when we refer you to our partners, but this does not influence our opinions or reviews. Learn more about Finder.

With property prices at an all-time high in many locations around Australia, retiring with your mortgage fully paid off is becoming a thing of the past. Instead, an increasing number of Australians must continue paying off their home loans well into retirement.

No matter what stage of life you’re in, it pays to regularly review your home loan and consider whether it still meets your needs and whether or not you may be able to refinance and find a better deal. This is especially true in retirement, when it’s crucial that you can look after yourself financially.

However, before you refinance, you should consider the pros and cons of this approach and whether it’s right for you.

Household Capital Home Loan Offer

Household Capital Refinance Variable Home Loan

5.15 % p.a.

variable rate

5.21 % p.a.

comparison rate

Household Capital Home Loan Offer

Apply for the Household Capital Refinance Variable Home Loan and Borrowers over 60 can refinance to this competitive, variable reverse mortgage.

  • Interest rate of 5.15% p.a.
  • Comparison rate of 5.21% p.a.
  • Application fee of 1.5 percent on drawn amount
  • Maximum LVR: 50%
  • Minimum borrowing: $50,000
  • Max borrowing: $1,000,000
Go to site

What you need to consider

  • Lower rate. Locking in a mortgage with a lower interest rate can save you a substantial amount of money over the life of your loan, which is ideal for your retirement years.
  • Finance options. While some retirees could benefit from a loan with a reduced interest rate and lower fees, other borrowers might want to switch to a loan that allows you to access equity. A line of credit or equity home loan can help free up some cash for use in your retirement, while some retirees may prefer the security of a fixed rate loan and its consistent repayments.
  • Managing your repayments. You need to be certain that you will be able to comfortably make repayments on time during your retirement. Consider your current financial capability and your ability to make repayments for several years without a stable income.
  • Lower bargaining power. Convincing a lender to refinance your loan once you’ve retired can be a difficult prospect. Without a steady income stream to rely on, you’ll be viewed as a higher-risk borrowing prospect than you would have been when you were in full-time employment.
  • Costs vs savings. Although the potential benefits of refinancing might sound attractive, remember that banks and other lenders don’t let you refinance for free. Refinancing typically comes with a number of fees attached, so you’ll need to work out whether the penalties you will have to pay will outweigh the savings you’ll enjoy after refinancing.
  • Plan ahead. Continuing to pay off a mortgage well into retirement is far from an ideal situation. With this in mind, planning ahead and assessing your home loan options in the lead-up to your retirement (5, 10 or even more years in advance) is the best way to set yourself up for a financially secure retirement.

Refinancing after retirement what to consider

How retirees can go about refinancing

  1. Consider your needs. The first question you need to ask yourself is whether or not your current home loan meets your needs. Can you comfortably afford to service the loan? Are you getting the best deal available? Could you benefit by switching from a variable to a fixed interest rate to enjoy fixed repayment amounts? It’s also essential that you consider your plans for retirement, such as if you would like to travel the world, downsize to a smaller home or something else.
  2. Identify risk. Refinancing during your retirement years is not always advisable due to the risk involved. If the cost of refinancing outweighs the benefits, you will be worse off financially. This is particularly risky considering you no longer have a reliable income source. You also need to consider the interest rate and market risk involved when opting for a new loan. Will you refinance to a fixed rate or split loan to minimise the risk of rising interest rates? Do you have enough savings to service the mortgage repayments?
  3. Sort out your finances. Speak to a financial planner about how you can effectively manage your finances for your retirement. A financial planner will be able to help you determine whether refinancing could be an effective and affordable strategy for you. A financial planner can also help you make the most of your super balance, develop a reliable tax strategy during your retirement and ensure that money never becomes a worry during your golden years.
  4. Get in touch with your lender. If you decide that refinancing your home loan could be a viable option, the next step is to contact your current lender and discuss your options. Borrowers of all ages have the freedom to negotiate the interest rate on their current loan — all you have to do to start the process is phone your bank. The home loan market in Australia is very competitive, so you might be surprised to find out how many lenders are willing to compromise a little. Of course, if you want to refinance so you can take out a different type of loan or access different borrowing features, you may need to look at the prospect of switching to another lender.
  5. Calculate costs. Exiting your current mortgage doesn’t always come cheap, so you’ll need to weigh up the benefits of refinancing against the extra expense you will incur. There are government charges for exiting your current mortgage, while many lenders also impose a discharge fee of somewhere between $150 and $350. Refinancing from a fixed rate loan will usually lead to a break fee. The next thing you need to consider is the cost of taking out a new loan, including application and establishment fees, legal costs and more. Our switching cost calculator is a useful tool when calculating the cost of refinancing, but make sure to seek advice from your accountant or financial planner so you can make an informed decision.
  6. Compare home loans. You can start comparing a wide range of home loans below, allowing you to narrow the lenders and loan features suited to your requirements. Once you understand your refinancing needs, you can speak with a mortgage broker to receive expert advice tailored to your situation. For example, maybe you want a no-frills loan that offers the cheapest possible repayments, or perhaps you want a line of equity loan that can help fund a trip around Australia. A broker can examine your financial situation and present you with a choice of suitable loans from a panel of lenders.

Refinance or downsize?

Refinancing after retirement downsizingFor many people, refinancing after retirement isn’t always a viable financial option. While a four-bedroom, two-bathroom family home might have been essential when you had three kids living with you, servicing a loan on a big house – not to mention looking after the maintenance on the property – is often no longer practical when you reach retirement age.

Consider the potential financial benefits of refinancing relative to the advantages of downsizing. If you were to sell your current home and move into a smaller residence, would you be better placed financially than if you refinanced your current loan on your current home?

There are several expenses to consider when refinancing a loan, including discharge fees on your current loan and application and legal fees for the new loan. Make sure you’re aware of all the potential expenses you could incur before you commit to this course of action.

If downsizing sounds like the best option for you, you’ll need to calculate all the costs involved in selling your home and purchasing another one. Selling costs include any repair or maintenance work that needs to be completed before selling, advertising costs, real estate agent commissions and discharge fees on your current home loan. There’s also the expense of moving into your new place, so use our property selling calculator to start doing the sums.

Before you commit to selling your home, it’s a good idea to wrap your head around the current performance of the local real estate market. A good real estate agent can explain how much similar properties in the area are worth and how much you could realistically expect to receive for your home, while you may also be able to increase the sale price by undertaking a few minor renovation projects.

Finally, consider whether or not now is a good time to list your property on the market. Selling your property can take a substantial amount of time and money, while buying a new property can also add costs such as stamp duty, conveyancing fees and lenders mortgage insurance. The sheer number of issues to consider can be a little daunting, so don’t hesitate to seek expert advice.

Whether you decide to refinance, downsize or simply stick with the status quo, make sure to compare all your options before deciding on the best course of action for your situation.

Compare refinancing deals

The table below has a range of competitive mortgages, but if you're over 55 it may be hard to apply for one. It's worth checking with a lender before submitting a full application.

Data indicated here is updated regularly
% p.a.
Offset account
Split account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Maximum Insured LVR Amount Saved Short Description
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
$0 p.a.
Up to $4,000 refinance cashback. A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
$0 p.a.
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
$8 monthly ($96 p.a.)
Up to $3,000 refinance cashback.
A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply. Low Rate Home Loan with Offset - LVR Under 60% (Owner Occupier, P&I)
$0 p.a.
A competitive rate with no application or ongoing fee. This loan is not available for construction.
Athena Celebrate Home Loan - 60% LVR  Owner Occupier, P&I
$0 p.a.
Owner occupiers with 40% deposits or equity can get this competitive variable rate loan. No upfront or ongoing fees.

Compare up to 4 providers

Aussie Home Loans Logo

Enter your details and get a free consultation with an expert broker from Aussie.

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2020 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

After entering your details a mortgage broker from Aussie will call you. They will discuss your situation and help you find a suitable loan.

  • A comparison of home loans from multiple lenders.
  • Expert guidance through the entire application process.
  • Free suburb and property reports.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 8 years running (2013-2020)

Images: ShutterStock

More guides on Finder

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site