The short answer
Refinancing is worth it when the interest you save outweighs the cost of switching within a reasonable time. Start by comparing your rate with what new customers are being offered, then factor in discharge fees, new loan costs and any fixed rate break costs. Often the first step is simply asking your current lender to lower your rate.
How do I know if I'm paying too much?
Check your current rate on your latest statement or banking app and compare it with rates offered to new customers for a similar loan size and LVR. Lenders often give their best rates to new borrowers, so a loan that was competitive three years ago may not be now.
What does it cost to refinance?
Typical costs include:
- A discharge fee from your current lender
- Government fees to discharge and register the mortgage
- Any application or valuation fee on the new loan (many lenders waive these)
- Break costs if you are leaving a fixed rate early, which can be significant
- LMI if you now borrow more than 80% of the property's value
How do I work out the break-even point?
Divide the total switching cost by the monthly saving. If it costs $1,000 to switch and you save $150 a month, you break even in about seven months. After that, the saving is yours. We do this sum for you, using real quotes.
When might refinancing not be a good idea?
- Break costs on a fixed rate outweigh the saving
- Your income or employment has changed and you may not qualify
- Property values have fallen, pushing your LVR above 80%
- You plan to sell soon
Frequently asked questions
Yes, and it often works. Lenders would rather reprice than lose you. A broker can show your lender a competing offer, which strengthens the request.
It can, if you take a new 30 year loan. That lowers repayments but can increase total interest. You can choose to keep your repayments the same, or select a shorter term, to stay on track.
Related
General information only. It does not take into account your objectives, financial situation or needs. Lender criteria vary and approval is at the lender's discretion. Homestead is a mortgage broker, not a lender. Last updated 2026-11-04.