Refinance Guides
When refinancing may be worth considering.
Refinancing means replacing your current home loan with a new one, either with your existing lender or a different one. It can be worth exploring, but the right decision depends on your costs, goals and current loan terms.
Common reasons to refinance
Borrowers typically refinance to access a lower interest rate, consolidate other debts, switch loan features such as an offset account, or access equity for renovations or investment. The right reason depends on your financial goals.
Costs to weigh up
Refinancing can involve discharge fees from your current lender, application or valuation fees with the new lender, and potentially lenders mortgage insurance if your equity position has changed. These costs should be weighed against the potential savings.
Break costs on fixed loans
If you are on a fixed rate and refinance before the fixed period ends, you may be charged a break cost. This can be significant, so it is worth checking with your current lender before starting the refinance process.
Equity and loan-to-value ratio
Your loan-to-value ratio (LVR) compares your loan balance to your property's value. A lower LVR generally gives you access to more competitive rates and can affect whether lenders mortgage insurance applies when refinancing.
What to compare beyond the rate
A lower rate is not the only factor. Loan features, fees, flexibility, and how well the new lender's policies fit your circumstances all affect whether refinancing is genuinely worthwhile.
This information is general in nature and does not take into account your personal circumstances. It is not financial advice or credit advice. Consider seeking professional advice before making a decision.