Should I Refinance My Home Loan? Compare now and see

Rates and fees last updated on

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.

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% p.a.
Offset account
Split account
Loan type
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Interest Rate (p.a.) Comp Rate^ (p.a.) Rates (p.a) Application Fee Ongoing Fees Maximum Insured LVR Amount Saved
loans.com.au Essentials - Variable (Owner Occupier, P&I)
A basic home loan with a competitive rate and low fees.
3.64% 3.66% Interest rate:
3.64%


Comp rate:
3.66%
$0 $0 p.a. 80% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.59% 4.48% Interest rate:
3.59%


Comp rate:
4.48%
$0 $375 p.a. 85% Go to site More info
UBank UHomeLoan Variable Rate - Standard Variable Rate Value Offer (Owner Occupier P&I)
Combine a low variable interest rate and free redraw with no application or ongoing fees.
3.74% 3.74% Interest rate:
3.74%


Comp rate:
3.74%
$0 $0 p.a. 80% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special
A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.69% 4.86% Interest rate:
3.69%


Comp rate:
4.86%
$0 $395 p.a. 90% Go to site More info
3.69% 3.72% Interest rate:
3.69%


Comp rate:
3.72%
$0 $0 p.a. 80% Go to site More info
Reduce Home Loans Rate Buster 100% Offset Variable Home Loan - Up to $750k (LVR <=80%)
Borrow up to 80% LVR with no ongoing fees and a 100% offset account.
3.54% 3.54% Interest rate:
3.54%


Comp rate:
3.54%
$440 $0 p.a. 80% Enquire now More info
Mortgage House Advantage Home Loan 80 - Special Owner Occupier ($500K+)
A low interest rate home loan that lets you borrow up to 80% of the property's value.
3.73% 3.88% Interest rate:
3.73%


Comp rate:
3.88%
$0 $10 monthly ($120 p.a.) 80% Go to site More info
loans.com.au Offset Variable - Up to 80% LVR (Owner Occupier P&I)
Take advantage of a 100% offset account along with no annual or application fees.
3.72% 3.74% Interest rate:
3.72%


Comp rate:
3.74%
$0 $0 p.a. 80% Go to site More info
CUA Kick Start 2 Year Introductory Variable Home Loan - (Owner Occupier, P&I)
A competitive rate for owner occupiers looking to buy or refinance.
3.79% 3.97% Interest rate:
3.79%


Comp rate:
3.97%
$0 $0 p.a. 90% Go to site More info
ING DIRECT Orange Advantage Loan - $150,000+ (LVR <=80% Owner Occupier, P&I)
A fully featured home loan with an offset account and discounts available. $1000 cashback offer available for loans over $300k. Terms and conditions apply.
3.79% 4.11% Interest rate:
3.79%


Comp rate:
4.11%
$0 $299 p.a. 80% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier Special Rate, P&I)
Owner-occupiers can lock in a competitive rate with no ongoing fees. Conditions apply.
3.84% 4.86% Interest rate:
3.84%


Comp rate:
4.86%
$0 $0 p.a. 95% Go to site More info
Finsure Home Loan Deal
Enjoy a low variable rate with no application fee.
3.69% 4.03% Interest rate:
3.69%


Comp rate:
4.03%
$0 $299 p.a. 80% Enquire now More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I)
A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.88% 4.89% Interest rate:
3.88%


Comp rate:
4.89%
$0 $395 p.a. 95% Go to site More info
SCU Basic Variable Rate Home Loan
A basic home loan with a low interest rate and a redraw facility available. Take out a new SCU loan and enjoy $500 cash back on loans above $150k, terms and conditions apply.
3.77% 3.81% Interest rate:
3.77%


Comp rate:
3.81%
$200 $0 p.a. 95% Go to site More info
ClickLoans The Online Home Loan - Owner Occupier ≤ 80% LVR, P&I
Enjoy a competitive variable interest rate, no application fee, no annual fee and an offset account with free redraws.
3.69% 3.69% Interest rate:
3.69%


Comp rate:
3.69%
$0 $0 p.a. 80% Go to site More info
Greater Bank Great Rate Discount Variable with Family Pledge Home Loan - Up to 110% LVR
Discounted rate available with family pledge loans. Family pledge loans require no LMI and no deposit. NSW, Qld and ACT only.
3.89% 3.89% Interest rate:
3.89%


Comp rate:
3.89%
$0 $0 p.a. 110% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
Get a competitive rate without features you may not use.
3.97% 4.02% Interest rate:
3.97%


Comp rate:
4.02%
$445 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier, P&I)
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.84% 4.22% Interest rate:
3.84%


Comp rate:
4.22%
$0 $395 p.a. 95% Go to site More info
P&N Bank & Home Loan & Bag
A flexible low-rate variable home loan that lets you combine your loan with other financial products.
3.99% 4.02% Interest rate:
3.99%


Comp rate:
4.02%
$395 $0 p.a. 80% Go to site More info
Bankwest Equaliser Home Loan - LVR ≤80% (Owner Occupier, P&I & $200k+) new customers only
Enjoy a variable 3 year introductory rate with the Bankwest Equaliser Home Loan.
3.72% 4.19% Interest rate:
3.72%


Comp rate:
4.19%
$0 $0 p.a. 80% Go to site More info
Select Encompass Credit Union Special Offer 2 Year Fixed Rate Home Loan
A fixed rate loan with limited fees and a competitive interest rate.
3.74% 4.15% Interest rate:
3.74%


Comp rate:
4.15%
$0 $0 p.a. 95% Go to site More info
Bank Of Queensland Economy Home Loan - Variable (Owner Occupier)
Take advantage of a basic no-frills home loan with extra repayments and fee free redraw.
3.89% 4.04% Interest rate:
3.89%


Comp rate:
4.04%
$300 $10 monthly ($120 p.a.) 95% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 2 Year Fixed LVR ≤85% ($150K+ Owner Occupier)
Discount off an already competitive 2 year fixed rate for loans over $150k. NSW,QLD and ACT residents only.
3.79% 4.46% Interest rate:
3.79%


Comp rate:
4.46%
$0 $375 p.a. 85% Go to site More info
CUA Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier)
A fixed rate home loan with no ongoing fees and flexible repayment options.
3.89% 4.72% Interest rate:
3.89%


Comp rate:
4.72%
$600 $0 p.a. 95% Go to site More info
Beyond Bank Low Rate Special Home Loan - LVR <70%
A special low variable rate for owner occupiers with 100% offset account and no application or ongoing fees.
3.83% 3.83% Interest rate:
3.83%


Comp rate:
3.83%
$0 $0 p.a. 70% Go to site More info
Bank of Queensland Fixed Rate Home Loan - 3 Year Fixed Rate Discount Rate $150k+ <80% LVR (Owner Occupier, P&I)
This fixed rate loan includes a special offer for new lending of $150000 with an LVR of 80% or less. Offer extended.
3.79% 4.44% Interest rate:
3.79%


Comp rate:
4.44%
$300 $10 monthly ($120 p.a.) 80% Go to site More info
State Custodians Low Rate LOC - LVR up to 80% (Owner Occupier)
Access the equity in your home with a competitive interest rate and no application fee.
3.69% 3.72% Interest rate:
3.69%


Comp rate:
3.72%
$0 $0 p.a. 80% Go to site More info
SCU My Life Fixed Rate Home Loan Package - 3 Years
Fix your rate for 3 years and borrow up to 95% LVR. Enjoy $500 cashback on new loans above $150k. Terms and conditions apply.
3.69% 4.00% Interest rate:
3.69%


Comp rate:
4.00%
$0 $350 p.a. 95% Go to site More info
QT Mutual Bank Mortgage Saver Home Loan
A low rate home loan with no application or ongoing fees. Note that to be eligible for this loan you must be QLD resident.
3.95% 3.95% Interest rate:
3.95%


Comp rate:
3.95%
$0 $0 p.a. 95% Go to site More info
CUA Fresh Start Basic Variable Home Loan - Owner Occupier
A basic home loan with flexible repayment options.
3.99% 4.00% Interest rate:
3.99%


Comp rate:
4.00%
$0 $0 p.a. 90% Go to site More info
Heritage Bank Discount Variable Home Loan - Special Rate Offer (Owner Occupier) New Customers Only
A great interest rate home loan offer with unlimited redraw and unlimited extra payments.
3.99% 4.04% Interest rate:
3.99%


Comp rate:
4.04%
$600 $0 p.a. 90% Go to site More info
loans.com.au Essentials - Smart Loan Package P&I
Package your home loan with your investment loan to get the same rate for both. Offer ends 31st July.
3.64% 3.66% Interest rate:
3.64%


Comp rate:
3.66%
$0 $0 p.a. 80% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Year Fixed (Owner Occupier Special Rate, P&I)
A limited time fixed rate home loan with extra repayment abilities. Conditions apply.
3.89% 4.78% Interest rate:
3.89%


Comp rate:
4.78%
$0 $0 p.a. 95% Go to site More info
Greater Bank Great Rate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A competitive variable rate with a redraw facility. NSW, QLD and ACT residents only.
3.99% 3.99% Interest rate:
3.99%


Comp rate:
3.99%
$0 $0 p.a. 85% Go to site More info
ME Basic Home Loan - LVR <=80% (Owner Occupier, P&I)
A low variable rate loan with no application or ongoing fees.
4.09% 4.11% Interest rate:
4.09%


Comp rate:
4.11%
$0 $0 p.a. 80% Go to site More info
NAB Base Variable Rate Home Loan - Owner Occupier (P&I)
A competitive no frills home loan. 350K NAB Rewards Points offer available. Terms and conditions apply.
4.17% 4.21% Interest rate:
4.17%


Comp rate:
4.21%
$600 $0 p.a. 95% Go to site More info
IMB Essential Home Loan - LVR <=90% (Owner Occupier)
100% offset account, unrestricted additional repayments and no monthly account keeping fees
4.19% 4.19% Interest rate:
4.19%


Comp rate:
4.19%
$0 $0 p.a. 90% Go to site More info
ME Flexible Home Loan Fixed - 3 Year Fixed Rate (Owner Occupier, P&I)
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
4.19% 4.82% Interest rate:
4.19%


Comp rate:
4.82%
$0 $0 p.a. 95% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Years Fixed (Standard Rate, P&I)
Enjoy a low interest rate and borrow up to 95% (with LMI) of your property's value.
4.54% 4.99% Interest rate:
4.54%


Comp rate:
4.99%
$0 $0 p.a. 95% Go to site More info
ANZ Simplicity PLUS Home Loan - Special Offer (Owner Occupier, P&I)
Enjoy a basic home loan with a high LVR and no application or ongoing fees.
4.03% 4.07% Interest rate:
4.03%


Comp rate:
4.07%
$0 $0 p.a. 95% Enquire now More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 1 Year Fixed (Standard Rate, P&I)
Investors can take advantage of a short term fixed rate with no application or ongoing fees.
4.54% 5.04% Interest rate:
4.54%


Comp rate:
5.04%
$0 $0 p.a. 95% Go to site More info
3.78% 3.79% Interest rate:
3.78%


Comp rate:
3.79%
$600 $0 p.a. 90% Enquire now More info
ME Flexible Home Loan Fixed - 2 Year Fixed Rate (Owner Occupier, P&I)
No application or ongoing fees and a competitive 2 year fixed rate.
3.88% 4.84% Interest rate:
3.88%


Comp rate:
4.84%
$0 $0 p.a. 95% Go to site 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%.
3.80% 3.81% Interest rate:
3.80%


Comp rate:
3.81%
$0 $0 p.a. 95% Enquire now More info
Bank of Queensland Fixed Rate Home Loan - 3 Year Fixed Rate (Owner Occupier, P&I)
Lock in a fixed interest rate term for repayment certainty.
4.39% 5.42% Interest rate:
4.39%


Comp rate:
5.42%
$300 $10 monthly ($120 p.a.) 95% Enquire now More info
Commonwealth Bank Wealth Package Fixed Home Loan - 2 Year Fixed (Owner Occupier) P&I
A package home loan with fee free extra repayments available during the fixed term.
3.99% 4.99% Interest rate:
3.99%


Comp rate:
4.99%
$0 $395 p.a. 95% Enquire now More info
St.George Fixed Rate Advantage Package -  2 Year Fixed Rate (Owner Occupier, P&I)
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cashback available for refinancers. Conditions apply.
3.99% 4.98% Interest rate:
3.99%


Comp rate:
4.98%
$0 $395 p.a. 95% Enquire now More info
Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years, P&I
Lock in a discounted fixed rate with a low service fee.
3.88% 4.88% Interest rate:
3.88%


Comp rate:
4.88%
$0 $395 p.a. 95% Enquire now More info
Virgin Reward Me Variable Home Loan - LVR <= 80% ($750k+ Owner Occupier, P&I)
Earn Velocity points on a competitive variable rate home loan with flexible features.
3.79% 3.92% Interest rate:
3.79%


Comp rate:
3.92%
$0 $10 monthly ($120 p.a.) 80% Enquire now 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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A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)

Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.

IMB Budget Home Loan - LVR <=90% (Owner Occupier)

Get a competitive rate without features you may not use.

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