When is the best time to refinance my mortgage?

Refinancing your home loan can lead to significant cost savings, but there are some key factors to consider before deciding whether it's the right time to make a move.

refinance your home loanIf you're thinking of refinancing, time is of the essence.

Refinancing your mortgage is not only an opportunity to reduce your periodic repayments, it also provides an avenue to access equity or restructure your mortgage so it better suits your lifestyle.

Whether you've found a better interest rate, your mortgage no longer satisfies your needs or you've experienced a major lifestyle change, many Australians are refinancing to take advantage of money-saving features in the competitive home loan market-- but when is the right time to make the change?

There is no 'one size fits all' in terms of the recommended time that you should refinance.

Rather, you should assess your personal and financial situation to see if there are any signs that suggest that it may be a good time to refinance (don't worry, we'll point you in the right direction).

Generally, you should conduct a financial health check at least once a year to see if your home loan is meeting your needs. Switching to a home loan that is even 0.5% lower than your current rate could save you thousands over the course of your loan.

If you're opting for a better interest rate, consider negotiating with your current lender as most banks are willing to offer customers a rate discount in order to retain your business.

Here's some general advice about how you can decide when to refinance your home loan.


When is the right time to refinance?

Deciding the right time to refinance your home loan will depend on your personal and financial situation, such as your job security and earning potential, among other factors. Speak with an experienced mortgage broker, accountant or financial adviser to help you decipher the best time to refinance.

Generally, the following may suggest that it is a good time to refinance:

  • Non-competitive interest rate. When you're lender's interest rate is no longer competitive. Use our home loan comparison tables to compare different rates available on the market so you can lower your monthly repayments and interest charges.
  • Interest rate rise. If you believe that the Reserve Bank or your lender will raise interest rates in the near future it may be a good time to scout for a competitive loan that offers a lower rate and other money-saving features such as a free redraw facility or an offset account. Please note that your refinancing decision should not be based on interest rate predictions alone as interest rates fluctuate regularly and are subject to a range of economic conditions.
  • Job security. Most lenders prefer borrowers to have been in the same job for the past 12 months as this indicates a reliable and steady income source. If this is the case, you may be in a stronger position to refinance as you will be considered a low-risk borrower (given that you meet all other eligibility requirements).
  • Consolidate debt. If you're finding it difficult to meet your debt payments, you may want to consolidate your personal debts into your mortgage so that you have one manageable repayment, instead of several. If structured correctly, consolidating your debts into your home loan can be an effective way to minimise your repayments if you make an effort to repay the loan as soon as possible.

Learn more about the refinancing process to decide whether this is the best solution for you.


According to Dominique Bergel Grant, founder of Leapfrog Finance, there are certain factors that may impact you directly when it comes to deciding the right time to refinance.

Dominique Bergel Grant

  • Founder of Leapfrog Finance
  • Financial Adviser and Mortgage Broker
  • Has worked in the financial services industry since 1999 and strives to provide her clients financial security and success

Factors that impact you directly

  • Income change. If you have a loss of income or you're faced with unexpected expenses, these factors may inhibit your borrowing capacity and your serviceability potential. As a result, you may not feel confident refinancing your mortgage during this time of uncertainty.
  • Lifestyle change.If you anticipate a significant lifestyle change, such as if you're planning a renovation or thinking of starting a family, some features of your existing mortgage may not be useful anymore and you may prioritise new features instead such as an offset account or a redraw facility. For instance, you may want to switch to a split-rate loan to take advantage of a low variable rate while still maintaining the security of a fixed rate as this will offer greater financial security for your renovation project or for the future of your family.

It's not all about the interest rate

While some borrowers refinance to lower their repayments by finding a better interest rate, Bergel Grant says that when it comes to refinancing your mortgage, it's important to ensure that you're getting the right features. She points out that you should check that you're not paying for features that you don't use.

'Mortgages with more features can seem to cost a bit more in fees and interest, however in the long run they have benefits than can save you thousands.' Dominique Bergel Grant, founder of Leapfrog Finance


The cost of refinancing

The cost of refinancing your home loan will influence your decision about whether or not now is the right time for you to switch lenders. You'll need to account for discharge fees ($150 - $350) charged by your current lender as well as any upfront application fees charged by the new lender.

Use our switching cost calculator to estimate your total refinancing costs. Remember to consult your accountant or financial planner to assist you with these calculations.

Refinancing can be a smart move if you take the time to research your options and weigh up the benefits and risks involved. Speak with experienced professionals such as a mortgage broker and a financial planner to help you decide on the timing of your refinance application.

Compare and switch to one of these mortgage offers

Rates last updated October 16th, 2018
$
% p.a.
Offset account
Split account
Loan type
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Maximum Insured LVR Amount Saved Short Description
3.64%
3.66%
$0
$0 p.a.
80%
A simple mortgage with a competitive interest rate and no application or monthly fees. Borrow up to $2 million from a convenient online lender.
3.57%
3.58%
$0
$0 p.a.
80%
Get a very low interest rate and pay fewer fees. Enjoy a fast online application process and add a 100% offset account for $10 a month.
3.59%
3.59%
$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.
3.64%
3.66%
$0
$0 p.a.
90%
Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online. Available with just a 10% deposit.
3.54%
3.57%
$0
$0 p.a.
80%
A competitive variable interest rate product aimed at refinancers looking to switch to a lower rate.
3.64%
3.64%
$0
$0 p.a.
70%
A basic variable home loan that offers a competitive interest rate with no application fees and no ongoing fees.
3.54%
3.58%
$0
$0 p.a.
80%
Get a competitive rate, save on fees and access a 100% offset account plus redraw facility. $900 cashback offer.
3.64%
3.64%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.75%
3.75%
$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.
3.68%
3.82%
$0
$10 monthly ($120 p.a.)
80%
Get double Velocity Frequent Flyer Points with this mortgage to spend on flights and more (for a limited time, subject to eligibility requirements). Redraw facility available on this variable rate home loan. Competitive interest rate.
3.88%
3.89%
$500
$0 p.a.
95%
This variable rate loan offers flexible repayments and a redraw facility. Available with a 5% deposit.
3.79%
3.80%
$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.
3.59%
3.62%
$0
$350 p.a.
90%
Get a low variable interest rate and buy a property with just a 10% deposit. 100% offset account attached.
3.49%
4.57%
$0
$395 p.a.
90%
Loans over $150k get a discount off an already low fixed rate. Available for NSW, QLD and ACT residents only.
3.87%
3.91%
$0
$10 monthly ($120 p.a.)
90%
Get Velocity Frequent Flyer Points at settlement, monthly and every three years, plus the option to make up to $10,000 a year in extra repayments.
3.68%
3.70%
$0
$0 p.a.
80%
A competitive variable rate mortgage for owner occupiers that comes with a no fee debit card with a $5,000 limit.
3.79%
3.79%
$0
$0 p.a.
80%
Access an offset account and pay no application or ongoing fees on this special variable rate for owner-occupiers.
3.64%
3.59%
$0
$0 p.a.
80%
Fast, 100% online application process. Very limited fees. Optional offset account (with fee).
3.74%
4.13%
$0
$349 p.a.
90%
Get a sharp rate plus package discounts and a 100% offset account.
3.69%
4.12%
$0
$395 p.a.
80%
Unlock a range of savings with this competitive package home loan offer. Offset account and redraw facility included.
3.84%
3.85%
$0
$0 p.a.
70%
Keep your LVR at 70% or below and enjoy a special discounted rate. Also, pay no application or ongoing fees.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
Earn double Velocity Frequent Flyer Points on your mortgage for a limited time (subject to eligibility requirements). Plus, access a 100% offset account to save on interest.
3.79%
3.82%
$0
$0 p.a.
80%
A variable investor mortgage with a high borrowing amount so you can fund a large purchase.
3.74%
3.74%
$0
$0 p.a.
80%
A basic owner-occupier home loan with a low variable rate that requires a 20% deposit.
3.68%
3.70%
$0
$0 p.a.
80%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
3.75%
4.00%
$0
$248 p.a.
70%
Borrowers with a 30% deposit can get this competitive rate.
3.70%
3.70%
$0
$0 p.a.
70%
Get a discount for keeping your LVR at 70% or below with this innovative online lender.
3.88%
4.51%
$0
$395 p.a.
90%
Lock in a very competitive 2 year rate and get package discounts on your credit card and offset account. $1,500 cashback available (conditions apply).
3.84%
3.84%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a free redraw facility with this innovative online lender.
3.59%
3.58%
$0
$0 p.a.
80%
Apply online and get fast approval for this fixed rate, low-fee loan with redraw facilities. Add a 100% offset account for a small fee.
3.72%
4.10%
$0
$395 p.a.
80%
New borrowers or refinancers can get a discounted rate with this package loan. Bonus $1,500 cashback for refinancers.
3.62%
3.62%
$0
$0 p.a.
95%
A low deposit mortgage with a competitive rate and plenty of flexibility. QLD residents only. Eligible borrowers can get a 15% discount on home and contents insurance for the life of their loan.
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.
3.85%
3.85%
$0
$0 p.a.
80%
Pay no application and ongoing fees with Macquarie Bank Basic Home Loan. Split and redraw facilities included.
3.67%
3.69%
$0
$0 p.a.
80%
A great interest rate home loan offer with unlimited redraw and unlimited extra payments.
3.74%
3.74%
$0
$0 p.a.
110%
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, Qld and ACT only.
3.69%
4.08%
$0
$349 p.a.
90%
Package your loan with other AMP products and save on rates and fees.
3.71%
3.71%
$0
$0 p.a.
70%
A variable rate home loan that has a lot of flexible features. This loan has a 100% offset account.
4.13%
4.14%
$0
$0 p.a.
90%
Access a fee-free offset account and a special interest rate for investors.
3.89%
3.94%
$0
$0 p.a.
90%
Borrow up to 90% of the value of the property you're buying, and pay no application fee.
3.77%
3.79%
$0
$0 p.a.
90%
Buy your home with just a 10% deposit, few fees and a reasonable interest rate.
3.93%
3.94%
$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.
3.99%
4.86%
$0
$0 p.a.
80%
Access a fee-free 100% offset account and pay no application or ongoing fees.
3.69%
4.54%
$0
$395 p.a.
90%
A fixed rate loan with a 100% offset account and the option to make additional repayments. Loans over $150k receive a discounted rate. NSW, QLD and ACT residents only.
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.
3.89%
3.91%
$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.
3.59%
4.14%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
3.94%
4.95%
$595
$0 p.a.
90%
Borrow up to 90% of the value of the property you're buying and pay no application or ongoing fees.
4.04%
3.93%
$0
$0 p.a.
80%
Fix your rate for 1 year and make interest-only payments.
3.99%
4.62%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
3.89%
4.24%
$0
$0 p.a.
80%
Fix your rate and minimise repayments for 2 years with this interest-only investor mortgage.
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.
3.89%
3.94%
$0
$0 p.a.
80%
Pay no application or ongoing fee and borrow up to 80% LVR.
3.74%
4.01%
$395
$0 p.a.
80%
A competitive 3 year fixed rate with no ongoing bank fees.

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