Should I Refinance My Home Loan? Compare now and see

If you are thinking about refinancing, it is best to consider all the reasons as well as options and if it is the right decision for you.

RefinancehomeloanUnhappy with your current home loan or feel it no longer meets all your lending needs? Maybe it's time to look at refinancing. In fact according to the Australian Financial Group (AFG) Mortgage Index from June 2015 38.6% of mortgages written by their brokers was for refinancing, up 2.5% from June 2014.

What does refinancing mean?

Refinancing is when you switch your home loan, either to a new lender or with your existing lender. It's often done to get a home loan with lower interest rates or fees, or when circumstances change, for example when renovating a home.

Compare a range of home loans available for refinancing

Below is a home loan comparison table which you can use to get an idea of what's available in the market. You can also use our calculator below to see if refinancing makes financial sense for your situation.

To find out more about a loan from a particular lender click on the 'go to site' button and you can lodge an enquiry or begin an application.

Rates last updated April 24th, 2018
$
Loan purpose
Offset 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 Max LVR Monthly Payment Short Description
3.64%
3.66%
$0
$0 p.a.
80%
Pay no ongoing fees and enjoy a flexible repayment schedule, including the ability to make unlimited additional repayments without penalty.
3.59%
3.60%
$0
$0 p.a.
90%
Borrow up to 90% of the value of your property and pay no ongoing fees with this loan from a leading international bank.
3.58%
3.58%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.69%
3.73%
$600
$0 p.a.
95%
Variable rate home loan from one of the big 4 banks. Available with just a 5% deposit.
3.69%
3.69%
$0
$0 p.a.
90%
Get a special discount for a limited time when you open an IMB Transaction Account. Face-to-face consultations available in NSW and ACT.
3.68%
3.69%
$0
$0 p.a.
95%
This variable rate loan offers flexible repayments and a redraw facility. Available with a 5% deposit.
3.52%
3.53%
$0
$0 p.a.
80%
Go from application to approval in as little as 20 minutes with a variable rate loan from this innovative online lender. Add a 100% offset account for $10 a month.
3.88%
4.89%
$0
$395 p.a.
95%
Low deposit home loan. Enjoy flexible repayment options while paying limited fees.
3.64%
3.67%
$0
$0 p.a.
80%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
3.49%
3.49%
$0
$0 p.a.
90%
Get a competitive variable rate with low fees. Add a 100% offset account for $10 a month. Available with a 10% deposit.
3.65%
3.66%
$0
$0 p.a.
90%
Offset up to $50,000 of the combined balances of your CUA Everyday Accounts and save on interest.
3.69%
3.69%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees. Refinance to this loan and you could get $1,000 in your USaver account (offer conditions apply).
3.65%
3.66%
$0
$0 p.a.
80%
This special rate loan comes with no application or ongoing fees, and offers a flexible repayment schedule.
3.54%
3.58%
$0
$0 p.a.
80%
Eligible borrowers can get $1,200 cashback on this loan with a 100% offset account and a redraw facility.
3.77%
3.81%
$200
$0 p.a.
95%
A simplified mortgage with a low interest rate and a redraw facility.
3.64%
4.03%
$0
$395 p.a.
80%
New borrowers or refinancers from another lender get a discounted rate with this package loan.
3.62%
3.62%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).
3.73%
3.73%
$0
$0 p.a.
80%
Get a 100% offset account and pay no application or ongoing fees on this special variable rate for owner-occupiers.
3.99%
3.74%
$0
$0 p.a.
90%
Borrow up to 90% of the value of the property you're buying, and pay no application fee.
3.74%
3.74%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule.
3.64%
3.64%
$0
$0 p.a.
70%
Get a discount for keeping your LVR at 70% or below with this innovative online lender.
3.72%
3.74%
$0
$0 p.a.
80%
Save on interest by taking advantage of a 100% offset account along with no ongoing fees or application fees.
3.94%
3.57%
$0
$0 p.a.
80%
Apply online for this fixed rate, low-fee loan with redraw facilities and an optional offset account.
3.70%
4.13%
$0
$395 p.a.
90%
Package your loan with an eligible credit card for discounts on rates and fees, and get a 100% offset account.
3.89%
3.91%
$0
$0 p.a.
80%
Borrow up to $2 million with this low investor rate. To get this discounted rate you must package the loan with your owner-occupier mortgage.
3.65%
4.84%
$0
$395 p.a.
90%
Pay no application fee for this package loan, and get access to a redraw facility. Face-to-face consultations available for NSW and ACT customers.
3.78%
3.78%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a free redraw facility with this innovative online lender.
4.19%
3.65%
$0
$0 p.a.
80%
Fast, 100% online application process. Very limited fees. Optional offset account (with fee).
3.97%
4.02%
$445
$0 p.a.
90%
Buy a home with just a 10% deposit with this variable rate loan. Face-to-face consultations available for NSW and ACT customers.
4.09%
4.12%
$0
$0 p.a.
90%
Access a fee-free offset account and a special interest rate for investors.
3.69%
4.11%
$0
$395 p.a.
80%
Save on interest with a 100% offset account and save on other ME products with this package loan.
3.97%
3.97%
$0
$0 p.a.
90%
A variable rate loan with a 100% offset account. Available with a 10% deposit.Face-to-face consultations available for NSW and ACT customers.
3.89%
4.87%
$0
$0 p.a.
90%
Borrow up to 90% of the value of the property you're buying and pay no application or ongoing fees.
4.14%
4.81%
$0
$0 p.a.
80%
Pay no application fees and access a fee-free redraw facility with this fixed rate loan.
4.19%
4.19%
$0
$0 p.a.
90%
100% offset account, unrestricted additional repayments and no monthly account keeping fees
3.89%
3.92%
$0
$0 p.a.
80%
A low-fee line of credit loan from an online lender. Unlock the equity in your home and make interest-only repayments with a competitive rate.
3.62%
3.62%
$0
$0 p.a.
95%
Free home and contents insurance for 1 year. Terms and conditions apply. QLD residents only.
3.99%
4.86%
$0
$0 p.a.
80%
Access a fee-free 100% offset account and pay no application or ongoing fees.
3.85%
4.05%
$0
$350 p.a.
95%
This high LVR fixed rate loan allows you to borrow up to 95% of the value of the property you're buying.
4.09%
4.11%
$0
$0 p.a.
80%
This variable rate loan keeps the features simple and fees low. This loan is offered by a 100% online lender.
3.64%
3.67%
$0
$0 p.a.
80%
A mortgage with a competitive variable rate, limited fees and plenty of flexibility.
3.69%
4.06%
$0
$349 p.a.
90%
Package your loan with other AMP products and save on rates and fees.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
Get a 100% offset account to save on interest charges, and pay no application fee.
3.69%
3.71%
$0
$0 p.a.
80%
A great interest rate home loan offer with unlimited redraw and unlimited extra payments.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
Earn Velocity Points on your mortgage (for a limited time, subject to eligibility requirements). Plus, access a 100% offset account to save on interest.
4.09%
4.12%
$0
$0 p.a.
95%
Buy a home with just a 5% deposit and get flexible repayment options and a redraw facility.
3.69%
3.69%
$0
$0 p.a.
70%
Pay no application or ongoing fees and get a flexible loan with the ability to split up to 6 times.
3.99%
4.03%
$0
$0 p.a.
95%
Buy a home with just a 5% deposit and pay no application or ongoing fees.
3.59%
4.42%
$600
$0 p.a.
95%
Get a 1% discount for the first two years of your loan and pay no application or ongoing fees.
3.68%
3.69%
$0
$0 p.a.
90%
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000.
3.79%
3.79%
$0
$0 p.a.
80%
A competitive variable rate for owner-occupiers who've saved a 20% deposit. Limited fees.
4.39%
5.42%
$300
$10 monthly ($120 p.a.)
95%
Lock in a fixed interest rate term for repayment certainty.
3.89%
4.97%
$0
$395 p.a.
95%
Get discounts on a range of Commonwealth Bank products and enjoy the option of fee-free extra repayments during the fixed term.
3.89%
4.96%
$0
$395 p.a.
95%
Refinancers can get $1,500 cashback. Conditions apply. Package your home loan with a Qantas rewards earning Amplify credit card.
3.89%
4.88%
$0
$395 p.a.
95%
Refinance from your existing loan and get a $1,250 rebate. Terms and conditions apply. Plus get discounts on a range of Westpac products.

Compare up to 4 providers

Aussie Home Loans Logo

Enter your details below to receive an obligation-free quote from an Aussie home loans expert today

finder.com.au guarantees the privacy and security of your details

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 IQ and Aussie Optimizer products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 ("Aussie"), and its appointed credit representatives. 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 Optimizer products is provided by Perpetual Limited ABN 86 000 431 827 (Lender). Credit for Aussie IQ is provided by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502. Home loans issued by the Lender are serviced by Macquarie Securitisation Limited ABN 16 003 297 336, Australian Credit Licence 237863 (MSL).

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. ©2018 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the finder.com.au privacy policy and the Aussie privacy policy.

Aussie Home Loans is both a lender and a mortgage broker, and offers a range of services.

  • FREE Suburb and Property Report with every appointment.
  • Access 3,000+ loans from over 20 lenders.
  • Get expert help with your loan application, including paperwork and eligibility.
  • Over 1000 brokers who are able to help you in your local area.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 5 years running (2013-2017)

Back to top

Refinancing isn't simply finding a better interest rate. It comes down to the costs, so you should work out if these are outweighed by the potential benefits.

There are many reasons why you should and shouldn't refinance, so read on to find out if it'll be worth it for you.

1. Should I refinance for a lower interest rate?

It's no surprise that this is one of the most common reasons why Australians refinance their mortgages, but it's not always the best. Before you leave your home loan in search of a lower rate, make sure you calculate all of the fees and charges which will be associated with your new loan, as well as comparing the interest rates.

Will you save on costs?
yes-no-arrow
You can use the switching calculator below to work out the costs of switching to a new home loan and whether or not you'll save by going for a lower interest rate. If you're switching for a lower rate but will pay a large fee to do so, in addition to continuous annual fees, it may not be worth switching. In this case, call your existing bank and ask if they can lower the rate.
Will you keep the same features?
yes-no-arrow
If you stand to lose features such as free redraws, branch access, free additional repayments or a 100% offset account, you'll have to really weigh up whether or not it's worth refinancing. Write down the features you actually use regularly and make sure these are included on the new home loan.
Will the savings you make pay your refinancing costs off within 2 years?
yes-no-arrow
Industry experts give the rule of thumb that if the savings made from refinancing take more than two years to start paying off then refinancing may not be the best choice. In some cases it's a good idea to approach your current lender first, tell them you're thinking of refinancing and asking for a lower rate. This can save you the hassle of refinancing if you won't actually recoup the costs of refinancing. It's also a good idea to take a look at the cash backs currently on offer for home loans to see if this is applicable to your loan.

2. Should I refinance if I'm renovating?

Refinancing to renovate is another popular reason why borrowers leave their current lenders for greener pastures. There are a number of loans available for those refinancing for renovations: construction home loans and line of credit home loans. A construction loan is more appropriate for structural renovations where serious work is carried out to the home including new piping, wiring, walls or adding a floor to the home.

Where smaller, cosmetic renovations are carried out such as the installation of a new bathroom or kitchen, products such as a line of credit loans or even personal loans can be used.

Below are some of the reasons why refinancing can be a good idea for renovating:

          • To access the equity in your property to fund the renovations. If your home is valued at more than the amount you owe on your loan you can refinance your loan to access that equity and then draw down on that amount to pay for your renovations.
          • To increase cash flow during the renovation process. When you are renovating your home you are channelling a lot of your extra money into contractors, fixtures and fittings and this can be a good time to refinance to an interest-only loan to reduce the amount you need to pay towards your loan each month.
          • Your existing home loan might not offer construction options. If you're going to be making extensive renovations to your home, and require or desire a draw down facility to minimise costs when building, a construction loan can be an alternative. Many home loans today offer construction loan options, but many don't, so you might need to refinance to one which does.

3. Should I refinance to consolidate my debts?

Another popular reason to refinance is to consolidate debts. This may involve adding a car loan, credit card loan or personal loan into your mortgage to take advantage of the lower rate typical of a home loan.

While the benefit can mean being able to rapidly pay off your debt, this kind of refinance requires strict discipline. If you roll your credit card debt into your mortgage for example, but then make regular payments, the shorter term debts you consolidated will now be paid off with your mortgage, taking as long as 25 to 30 years.

However, if you keep making the same repayments you were previously making, or if extra repayments are made towards the loan then this will work to pay off the debt faster.

Matthew's Debt Doubt

File number: 22978136Matthew has a $300,000 loan remaining on his home. He also has a credit card debt which has gradually spiralled out of control and sits at $20,000. Matthew wants to refinance and consolidate his credit card debt into his home loan, increasing the balance to $320,000. While he may think this is the best option to get him out of strife, Matthew's overlooking how interest will impact his debts.

          • $20,000 at 5% interest over 25 years = Interest of $15,075 (monthly repayments of $117)
          • $20,000 at 18.5% interest over 5 years = Interest of $10,799 (monthly repayments of $513)

As can be seen, while the monthly repayments are much lower with a lower interest rate over 25 years, the interest Matthew will pay is much higher.

If he instead rolled the $20,000 debt into his home loan and made regular monthly repayments of $377, he could pay this debt off in 5 years and only would pay interest of only $2,645.

Should I refinance to consolidate my debts?

Back to top

4. Should I refinance to buy or build a new home?

Refinancing your existing loan to a new one with a larger or smaller loan size might be required if you're looking to buy a new home, depending on how much it costs. You might also want to make use of new features when you buy your next home that you previously didn't need, like an offset account.

If you're building a home, you might want to refinance to a home loan with a construction option. This option lets you withdraw the funds you need to pay your builder at the different stages of construction. This means amounts you haven't withdrawn yet won't be charged interest, saving you money during the time taken to build your new dream home.

5. Should I refinance for more flexibility?

A basic home loan can suit you when you first have a mortgage because it allows you to concentrate on making repayments without being distracted or being charged additional fees other complex features. However, if you are ready to really take control of your mortgage, you may want more flexibility with a fully featured loan. This means you'll get all the features including an offset account, split facility, redraw facility and much more to help you pay off your loan faster.

Variable rate loans tend to offer the most flexibility, but increased competition in the market has meant that some lenders are offering more features on fixed rate loans. The downfall with variable rate loans is that if the official cash rate goes up, your interest rate will most likely go up with it.

Click here to learn about a range of home loan options and features

6. Should I refinance if I can't afford my mortgage?

If you can't comfortably meet your mortgage repayments anymore you might be able to refinance your loan to extend the term and reduce repayments, or switch to a more basic loan with a lower interest rate.

If you're refinancing to a longer term to lower your repayments, know that you might end up paying more interest than what you normally would've. Also, rather than refinancing, it might be worthwhile speaking to your lender and explaining to them that you need some extra time to sort out your financial situation. If you can no longer afford repayments, write a budget and work out why this might be happening. Are you spending too much on holidays? Is your credit card or personal loan debt getting out of control? Is it perhaps time to start a side business?

If you're looking to refinance to a home loan with a lower rate, be aware that exit fees and upfront costs might reduce some of the savings, so ensure you can cover these costs. Make sure you look at our cashback page from time to time, as lenders have been known to give $1,000+ to those refinancing to them as an incentive.

Lenders have hardship teams devoted to helping you if you're experiencing a difficult period, so be sure to speak to these professionals before refinancing.

Missed a mortgage repayments? Keep calm and read our guide.

7. Should I refinance my home loan if I have bad credit?

If you have bad credit you can still refinance your home loan, although you may need a specialist lender to approve your mortgage depending on how severe the negative listings on your credit file are. Bad credit home loans can have higher interest rates than regular home loans, so if you've been diligently paying off a bad credit home loan and feel it's time you refinanced to a regular home loan with a regular interest rate, you might want to first contact a mortgage broker or speak to your existing lender.

They'll be able to advise you about whether or not it will be possible to switch to a regular home loan or not and save you the hassle of applying for a home loan if you have a slim chance of being approved.

Speak to a bad credit specialist lender today about your options.

How often can I refinance my mortgage?

You can refinance your mortgage as much as you'd like, but there is a point where it doesn't become economical and will end up costing your money, rather than saving you money.

Data from mortgage broking company AFG suggest that refinancing activity is a lot higher when interest rates are going down, so the average number of times a borrower refinances in their lifetime for their main residence varies according to the economic cycle.

These life stages suggest that a typical borrower could refinance up to five times to a loan that suits their situation.

  • First home buyers - usually a low and fixed rate with no features so they can focus on paying back the loan
  • Young professional or family - a variable interest rate with a range of features to pay off their loan sooner.
  • Middle aged professional - a variable rate or line of credit with a range of features to tap into their equity for more investments.
  • Preparing for retirement - a line of credit loan to tap into equity to make larger investments than the previous life stage.
  • 55+ or retired - line of credit or reverse mortgage.

Experts suggest that you perform a health check once a year to evaluate if your current mortgage is meeting your personal and financial needs. If you're happy with loan, then there is no need to refinance. However, if you've reached the conclusion that your loan is not meeting your needs one way or another, then it might be time to start assessing whether refinancing makes financial sense for your situation.

This process involves assessing your personal and financial situation, as well as comparing other loans in the market to see if you're truly getting the best deal.

Back to top

What is the true cost of refinancing?

Estimates about the cost of refinancing vary between $500 to over $3,000, so you should ask your current lender, as well as your potential lender what costs you'll be up for before considering refinancing. Note that the costs below are indications only and do not take into account your personal situation.

Fees charged by your current lender

  • Discharge fees up to $400.
  • Exit fees (these now only apply to fixed rates and loans entered into before July 2011).
  • Registration fees.

Fees charged by your new lender

  • Application fees up to $600.
  • Valuation fees up to $300.
  • Settlement fees up to $300.
  • Legal fees up to $150.
  • Lender's Mortgage Insurance, even if you've paid it for your current lender.
  • For those living in VIC, NSW, TAS, WA or SA, in some cases stamp duty will need to be paid on the new mortgage.

Back to top

Should I refinance or just modify my loan?

In some cases, you may be able to switch from one home loan your lender offers to another one which has the features you're looking for. There can be switching costs involved depending on the lender, so be sure to discuss this first before carrying out the switch.

Not every borrower will receive savings by refinancing. In many cases it might be worth asking your current lender for a discount on your interest rate if you just want a cheap rate.

Refinancing Tip

Lenders usually have a department dedicated to retaining customers. These service representatives have been known to lower interest rates or waive different fees if you tell them you're considering refinancing. In some cases these savings can outweigh what you would have received by switching loans, especially given that you won't have to pay any exit fees or upfront fees for leaving your home loan to get another.

Click here to learn about the process of refinancing with your current lender.

The steps to refinancing your mortgage

Read more on the steps involved with refinancing with our step-by-step guide.

Back to top

Are there any risks related to refinancing?

beware

Before deciding to refinance there are some considerations that you should take into account. One of these is that a lower interest rate alone does not necessarily mean that the mortgage will be cheaper than the loan you already have. Some loans are promoted on the basis of a lower interest rate but when you look closely at the fine print you may find that the fees and charges will more than make up for the lower interest rate. Make sure you check the comparison rate, which takes into account more of the fees.

The lower interest rate may also mean a loss of flexibility in your home loan. You may lose the ability to make additional payments when you have spare money to invest such as any bonus in wages or tax returns, or lose valuable features such as offset accounts. This means you must be careful in what you are doing and know exactly what the result will be if you decide to go ahead.

A further consideration will be the cost of any exit fees that are charged before you can be released from your old home loan obligations. In the case of new loans entered into after 1 July 2011, these exit fees only apply to fixed rate loans. Sometimes these fees can be quite substantial, especially in the early years of your existing mortgage. On the other hand some lenders discontinue the exit fee after you have been repaying the loan for five years or more.

Marc Terrano

Marc Terrano is a content marketer manager at finder. He's been writing and publishing personal finance content for over five years and loves to help Australians get a better deal.

Was this content helpful to you? No  Yes

Related Posts

Home Loan Offers

Important Information*
loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.64%p.a.
comp rate of 3.66%p.a.

Tic:Toc Live in Loan Variable Rate - Principal & Interest

Go from application to approval in as little as 20 minutes with a variable rate loan from this innovative online lender. Add a 100% offset account for $10 a month.

NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special

Start your home buying journey with 2 years of fixed repayments and a reasonable rate from a big 4 bank. Available with a 10% deposit.

UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupied Variable P&I Rate — borrowing $700,000 or more

Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au 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, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.
Ask a question
Go to site