Last reviewed: August 2026
What is refinancing?
Refinancing is simply replacing your current home loan with a new one from a different bank.
Why do people refinance?
There are a few common reasons.
- A lower interest rate
- Switching to a better loan structure
- Taking advantage of a strong offer in the market
- Accessing equity for renovations, lifestyle, holidays, a wedding, or a vehicle
- Consolidating other debts into one repayment
At the end of the day, it comes down to how the Australian banking industry actually works. It isn't built around loyalty. The best offers usually go to new customers, not existing ones, because banks are trying to grow their customer base, not necessarily reward the people already on their books. Being proactive and reviewing your loan every few years is genuinely how you take advantage of these offers and save money.
How does the refinancing process actually work?
Here's how it actually plays out, step by step.
Step 1: Speak to a broker
This starts with a conversation about what isn't working with your current loan, or simply wanting a read on whether better offers exist in the market. From there, we assess your current position, your goals, and what you're trying to achieve, then look at what's actually available that fits those goals. As part of this step, we also organise a valuation of your property, which shows the potential equity available, useful if maximising equity extraction is part of the plan.
We present you with the options, and you decide which one, if any, makes sense.
One important caveat here. If the reason for refinancing is purely about rate or pricing, it's often worth speaking to your existing lender first. Submitting a discharge request can prompt a conversation with their retention team, and retention teams frequently offer the sharpest rates available, since keeping you as a customer is cheaper for them than losing you. If refinancing to a new lender still comes out ahead after that conversation, it's worth moving forward.
Step 2: Apply with the new lender
This is a full, new credit assessment, which means a new credit enquiry on your file. You'll need to provide the full set of documentation, income documents, identification, your current home loan statements, and bank statements, much like your original home loan application.
Step 3: Settlement
Once your new loan is approved, your loan documents get sent out for you to sign. If you haven't already, you'll submit a discharge form to your existing bank, and from there, the banks organise a settlement date. On settlement, any equity you've elected to withdraw is released, and your new loan is set up and active.
Worth knowing: some banks participate in what's called Fast Refi, which means the discharge process doesn't need to be completed before the refinance settles. In these cases, we can sometimes settle a refinance within two to three days of approval. Where a full discharge is required and we're waiting on your existing lender, the process typically takes two to four weeks from start to finish, depending heavily on how quickly documentation comes together and how fast lenders process the application.
What does refinancing actually cost?
A shiny new rate is only part of the picture. It's worth factoring in the actual cost of switching before deciding.
- Discharge fee. Charged by your existing lender to close out your current loan, typically $300 to $500.
- Government discharge and transfer fees. State governments charge a fee to discharge the mortgage and a separate fee to register the new one, generally $200 to $300 each, so around $400 to $600 combined.
- Application, settlement, or legal fees. Charged by some new lenders, though many waive these for straightforward refinances.
- Break costs. If you're on a fixed rate and refinancing before the term ends, a break fee may apply.
All up, refinancing costs can range from as low as $600 up to $1,500, depending on your specific situation. It's worth weighing this against the savings before deciding if it's actually feasible.
How do you know if refinancing is actually worth it?
Our Refinance Feasibility Calculator works this out exactly, showing what you'd save per month, per year, and over the full loan term, so you can see whether it genuinely makes sense for your situation.
Resetting your loan term
Here's a detail that catches a lot of people out. Say you're five years into a 30 year loan, so you've got 25 years left, and when you refinance, your new loan resets back to a full 30 year term. This is called re-amortising the loan, and it means you'll actually pay more interest over the life of the loan compared to if you'd refinanced while keeping your remaining term the same. Your monthly repayment will likely drop, since it's spread across more years again, but the total interest you pay increases. Worth keeping in mind and discussing before you commit to a longer term just because the repayment looks smaller.
Refinancing with a new lender versus staying with your current one
Some lenders offer internal refinances, refinancing within the same bank rather than moving to a new one. This is worth exploring if you want to avoid the fees that come with switching lenders entirely. That said, sometimes the better rate or structure available elsewhere makes switching worth it even with those costs factored in.
What documents do you need to refinance?
It's similar to any standard home loan application. Payslips if you're a PAYG employee, or tax returns and business financials if you're self employed. Bank statements, your current home loan statements, and identification.
How we help
We run the full comparison for you, rate, fees, structure, and what your current lender is prepared to offer to retain you, before recommending anything. We handle the application, the valuation, and the discharge process end to end, so you're not managing multiple lenders and a stack of paperwork on your own.
This page provides general information only and does not take into account your personal financial situation. Costs, timelines, and lending policy vary by lender and can change, and you should confirm current details before relying on them.
Useful tools and resources
For independent guidance on switching home loans, see ASIC's Moneysmart guide to switching home loans.
See whether refinancing is worth it for your situation with our free Refinance Feasibility Calculator, or explore our Refinancing service.
