Refinancing means switching your home loan to a different lender or product. Done right, it can save you thousands. This guide helps you decide if refinancing is right for you.
Reasons to Consider Refinancing
- Lower interest rate: The most common reason—rates change, and loyalty doesn't always pay
- Better features: Offset accounts, redraw facilities, flexible repayments
- Access equity: Tap into your home's increased value
- Consolidate debts: Roll high-interest debts into your mortgage
- Change loan type: Switch from fixed to variable or vice versa
How Much Could You Save?
The potential savings depend on your loan size and the rate difference:
| Loan Amount | Rate Reduction | Annual Saving |
|---|---|---|
| $500,000 | 0.50% | ~$2,500 |
| $500,000 | 1.00% | ~$5,000 |
| $750,000 | 0.50% | ~$3,750 |
Costs to Consider
- Discharge fee: $150-$400 from your current lender
- Government fees: ~$200 for mortgage registration
- Valuation fee: Often free, sometimes $200-$400
- Break costs: Can be significant if breaking a fixed rate
Warning: Fixed Rate Break Costs
If you're on a fixed rate, breaking early can cost thousands—sometimes tens of thousands. Always get a break cost quote before proceeding.
The Break-Even Point
Calculate how long it takes for savings to exceed costs:
Break-even months = Switching costs ÷ Monthly savings
If you plan to stay in your loan longer than the break-even point, refinancing makes sense.
The Refinancing Process
- Review your current loan: Know your rate, balance, and any break costs
- Compare options: We search 30+ lenders for better deals
- Apply for new loan: Similar to your original application
- Valuation: New lender values your property
- Settlement: New loan pays out old loan (2-4 weeks)
When NOT to Refinance
- You're about to apply for more credit (delays other applications)
- Your property value has dropped significantly
- You're planning to sell soon
- Break costs exceed potential savings
- Your financial situation has changed negatively
Next Steps
- Use our refinance calculator to estimate savings
- Book a free assessment to compare your options
General information only, current as at 15 January 2025. It does not take your objectives, financial situation or needs into account. Grants, schemes, rates and lender policies change; check the figures that matter to you before you act, or speak with us. J2C Mortgage Advisory is Credit Representative 577408 of Australian Finance Group Ltd, Australian Credit Licence 389087.
