Should I Refinance My Home Loan? Compare now and see

Rates and Fees verified correct on December 4th, 2016

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.

Compare home loans

Rates last updated December 4th, 2016.

Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years

Interest rate is now 3.99%

November 28th, 2016

CUA Kick Start Variable Home Loan - 2 Years Introductory (Owner Occupier)

Comparative rate decreases by 0.03%

November 29th, 2016

UBank UHomeLoan Variable Rate - Standard Variable Rate (Investor with Investor Extra Offer P&I)

Comparative rate decreases by 0.10% | Interest rate decreases by 0.10%

December 2nd, 2016

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Jodie Humphries Jodie
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Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
3.74% 3.74% $0 $0 p.a. 80% Go to site More info
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.
3.55% 3.57% $0 $0 p.a. 90% Go to site More info
loans.com.au Essentials - Variable Refinancers Only (Owner Occupier, P&I)
A low-interest rate loan suited for refinancing with no application or ongoing fees.
3.59% 3.61% $0 $0 p.a. 80% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed ($150K+ Owner Occupier)
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.59% 4.42% $0 $375 p.a. 85% Go to site More info
ANZ Breakfree Package Home Loan - 2 Year Fixed (Owner Occupier) $150k+
This 2 year fixed ANZ Breakfree Package rate comes with package discount and product bundle. Terms and conditions, package fee and fees, charges & eligibility criteria apply.
3.75% 4.62% $0 $395 p.a. 95% Go to site More info
ClickLoans The Online Home Loan - Owner Occupier ≤ 80% LVR
Enjoy a competitive interest rate when you have a deposit of at least 20%.
3.69% 3.69% $0 $0 p.a. 80% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier)
A fixed rate package loan with flexible repayments options. 250,000 Velocity Frequent Flyer point offer, conditions apply.
3.75% 4.87% $0 $395 p.a. 95% Go to site More info
Bank Australia Basic Home Loan - Variable (Owner Occupier)
A competitive variable that allows borrowers to borrow from a minimum of $100,000 and $0 ongoing fee.
3.59% 3.60% $0 $0 p.a. 80% Go to site More info
CUA Kick Start Variable Home Loan - 2 Years Introductory (Owner Occupier)
Borrow up to 90% LVR and enjoy an introductory rate for the first 2 years.
3.69% 3.87% $600 $0 p.a. 90% Go to site More info
State Custodians Standard Variable Spring Special - LVR 80% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.59% 3.92% $0 $299 p.a. 80% Go to site More info
Australian Unity Kick Starter Home Loan
$0 ongoing service fees, maximum 80% LVR and a linked transaction account.
3.79% 3.82% $600 $0 p.a. 80% Go to site More info
ME Bank Flexible Home Loan Fixed - 3 Year Fixed Rate (Owner Occupier)
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
3.84% 4.66% $0 $0 p.a. 95% Go to site More info
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier)
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.74% 4.12% $0 $395 p.a. 95% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
A competitive budget rate without any unwanted bells and whistles.
3.87% 3.92% $445 $0 p.a. 90% Go to site More info
Switzer Home Loan
No upfront or ongoing fees and a competitive variable rate for owner occupiers.
3.89% 3.89% $0 $0 p.a. 90% Go to site More info
State Custodians Standard Variable Spring Special - LVR 90% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.69% 4.02% $0 $299 p.a. 90% Go to site More info
Greater Bank Ultimate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A discounted rate with 100% offset account. NSW, QLD and ACT residents only.
3.89% 4.27% $0 $375 p.a. 85% Go to site More info
Bank Australia Premium Home Loan Package - 2 Year Fixed (Owner Occupier) LVR < 80%
Buy a new home even if you haven't yet sold your existing one with the bankmecu Bridging Loan
3.69% 4.24% $0 $350 p.a. 95% Go to site More info
IMB Accelerator Home Loan  - LVR <=80% $300k+ (Owner Occupier)
A two year discounted rate which reverts to an ongoing life of loan discount afterwards.
3.64% 4.39% $445 $0 p.a. 80% Go to site More info
Greater Bank Great Rate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A competitive rate with redraw facility. NSW, QLD and ACT residents only.
3.89% 3.89% $0 $0 p.a. 85% Go to site More info
ClickLoans The Online Investor Home Loan - LVR <70%
An investment home loan with competitive rate and 100% offset account.
3.79% 3.79% $0 $0 p.a. 70% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 2 Year Fixed ($150K+ Owner Occupier)
Discount off an already competitive 2 year fixed rate for loans over $150k. NSW,QLD and ACT residents only.
3.74% 4.40% $0 $375 p.a. 85% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Years Fixed (Owner Occupier)
Enjoy a low interest rate and borrow up to 95% (with LMI) of your home value.
3.69% 4.76% $0 $0 p.a. 95% Go to site More info
Bankwest Complete Home Loan Package Fixed - 5 Year Fixed Rate LVR <90% (Owner Occupier)
Get the security of knowing your repayments with this 5 year fixed rate package home loan.
3.98% 4.35% $0 $395 p.a. 90% Go to site More info
AMP Essential Home Loan  -  Owner Occupier
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
3.98% 4.00% $350 $0 p.a. 90% Go to site More info
Bank Australia Premium Home Loan Package - LVR<=80% $700k + (Owner Occupier)
Enjoy the discounted interest rate with redraw facility and no ongoing fees.
3.74% 4.09% $0 $350 p.a. 95% Go to site More info
Beyond Bank Low Rate Special Home Loan
A special low variable rate for Owner Occupier with 100% offset account and no application or ongoing fees.
3.73% 3.73% $0 $0 p.a. 70% Go to site More info
Switzer Fixed Rate Home Loans - 2 Years Fixed Rate
A competitive 2 year fixed rate with your very own lending service manager.
3.97% 3.99% $0 $0 p.a. 80% Go to site More info
Australian Unity Health, Wealth and Happiness Package - (Owner Occupier)
Get a 0.60% discount on your rate, a 100% offset account and no ongoing fees.
3.99% 4.02% $600 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 1 Year Fixed (Owner Occupier)
Get a short term fixed rate for that investment property with no application or ongoing fees.
3.69% 4.87% $0 $0 p.a. 95% Go to site More info
3.85% 4.26% $0 $395 p.a. 80% Go to site More info
CUA Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier)
A fixed home loan with no ongoing fees and flexible repayments options.
3.69% 4.56% $600 $0 p.a. 95% Go to site More info
3.89% 3.89% $0 $0 p.a. 80% Go to site More info
Switzer Investment Loan
An investment loan with no application or ongoing fees, and your very own lending service manager.
4.09% 4.09% $0 $0 p.a. 80% Go to site More info
IMB Essential Home Loan - LVR < 80% (Owner Occupier)
100% offset account, unrestricted additional repayments and no monthly account keeping fees
4.09% 4.09% $0 $0 p.a. 80% Go to site More info
ME Bank Flexible Home Loan Fixed - 2 Year Fixed Rate (Owner Occupier)
No application or ongoing fees and a competitive 2 year fixed rate.
3.84% 4.75% $0 $0 p.a. 95% Go to site More info
NAB Base Variable Rate Home Loan - Owner Occupier (P&I)
A competitive no frills home loan with no application fees for a limited time. 250,000 Velocity Frequent Flyer point offer, conditions apply.
4.10% 4.14% $0 $0 p.a. 95% Go to site More info
Commonwealth Bank Wealth Package Fixed Home Loan - 2 Year Fixed (Owner Occupier)
Fee free extra repayments available during the fixed term. $1,250 cash back offer for refinancers. Conditions apply.
3.84% 4.97% $0 $395 p.a. 95% More info
Suncorp Home Package Plus Fixed - 3 Year Fixed Rate (Special Offer $150k+ LVR <=90% Owner Occupier)
Lock in a special offer rate for 3 years for loans over $150k with LVR below 90%.
3.64% 4.26% $0 $375 p.a. 90% More info
St.George Fixed Rate Advantage Package -  2 Year Fixed Rate (Owner Occupier)
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cash back available for refinancers, conditions apply.
3.99% 5.07% $0 $395 p.a. 95% More info
Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years
A low interest rate home loan and competitive two year fixed rate.
3.99% 4.97% $0 $395 p.a. 95% More info
St.George Basic Home Loan - Promotional Rate (Owner Occupier, P&I)
A no frills loan with a competitive rate and a maximum LVR of 95%.
4.08% 4.09% $0 $0 p.a. 95% More info
Westpac Flexi First Option Home Loan - 3 Years Introductory Special Offer (New Owner Occupier, P&I)
A limited time deal for new owner occupiers. Advertised rate includes 1.03%p.a. discount for the first two years.
3.99% 4.37% $0 $0 p.a. 95% More info
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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?

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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.

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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.

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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.

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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

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at finder.com.au. Talk to him to find out more about home loans.

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HSBC Home Value Loan - Resident Owner Occupier only

Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.

ME Bank Basic Home Loan - LVR <=80% Owner Occupier

A low variable rate loan with no application or ongoing fees.

NAB Choice Package Home Loan - 3 Year Fixed (Owner Occupier)

Receive discounts on interest rates with the Choice Package. 250,000 Velocity Frequent Flyer point offer, conditions apply.

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