The Complete Guide to Refinancing Your Home Loan in Australia (2026)

What Is Refinancing?

Refinancing means replacing your existing home loan with a new one - either with your current lender (internal refinance) or a different lender (external refinance). The goal is usually a lower interest rate, better features, access to equity, or debt consolidation.

When Should You Refinance?

Consider refinancing when: your rate is 0.5% or more above the best available; your fixed term is ending in the next 1–3 months; your property has risen in value (improving your LVR tier); you want to access equity; or your financial situation has improved and you qualify for better terms.

Step 1 - Know Your Numbers

Before contacting anyone, be clear on your current rate, loan balance, remaining term, monthly repayment, and any break costs if you're on a fixed rate. Check your latest statement or log into your bank's app.

Step 2 - Check Your LVR

Your Loan-to-Value Ratio is your loan balance divided by your property's current value. Below 80% means no Lenders Mortgage Insurance and better rate tiers. If property values have risen in your area since you bought, your LVR may have improved dramatically.

Step 3 - Compare Lenders

Don't just visit your bank's website - they only show their own products. A mortgage broker accesses 40+ lenders including smaller lenders with highly competitive rates that don't advertise prominently. This is where the real savings are found.

Step 4 - Apply

Once you've chosen a lender, the formal application begins. Typical documents needed: last 2 payslips, most recent tax return, 3 months of bank statements, council rates notice, existing mortgage statement, and ID. Your broker provides a specific checklist for your chosen lender.

Step 5 - Valuation

The new lender orders a property valuation - typically a desktop valuation completed in 48–72 hours at no cost to you. Occasionally a full valuation is required. The assessed value affects your LVR tier and the rate you receive.

Step 6 - Settlement

Once approved, your broker coordinates the discharge of your old loan and drawdown of the new one. You sign the loan documents and your broker manages everything else. Most refinances settle in 3–6 weeks from application.

What Does It Cost?

Typical costs include a discharge fee ($150–$400), government registration fees ($150–$350), and possibly a new establishment fee ($0–$600, often waived). Total: $600–$1,500. With a monthly saving of $300, you break even in 2–5 months - then profit every month after.

Key Terms to Know

Comparison rate: The interest rate plus most fees as a single percentage - always compare loans by this, not just the advertised rate. Offset account: A transaction account where your balance reduces the loan balance on which interest is calculated. Break cost: A fee for exiting a fixed rate loan early - can be significant if rates have fallen since you fixed. LMI: Lenders Mortgage Insurance - paid by you if your LVR exceeds 80%.