How to refinance your home loan in Australia (step by step)
Refinancing simply means replacing your current home loan with a new one, usually to get a sharper interest rate, unlock better features, or access some of the equity you have built up. It sounds like a big undertaking, but the process is more straightforward than most people expect, and the savings can be substantial.
Here is exactly how it works, stage by stage, and roughly how long each part takes.
Step 1: Work out whether it is actually worth it
Before you do anything, get clear on why you are refinancing. The most common reasons are a lower rate, switching from interest only to principal and interest (or vice versa), consolidating debt, or releasing equity for renovations or an investment.
The quickest sanity check is to compare your current rate against what is available today. If your rate starts with a "6", or a high "5", there is a strong chance a better deal exists. Run your numbers through a rate comparison first so you know what you are aiming for.
Step 2: Add up the costs of switching
Refinancing is not free, but the costs are usually modest and often recovered within months. Typical fees in 2026 include:
| Cost | Typical range |
|---|---|
| Discharge fee (to your current lender) | $150 to $500 |
| Application or settlement fee (new lender) | $0 to $600 |
| Property valuation | $0 to $400 (often waived) |
| Government mortgage registration / de-registration | around $150 to $350 |
| Break costs (fixed loans only) | Varies, can be significant |
All up, switching to a new lender usually costs somewhere between $500 and $2,000. The big exception is a fixed-rate loan: if you break a fixed term early, the lender can charge a break cost to recover their lost interest, and on larger loans that can run into the thousands. Always ask your current lender for a break cost figure in writing before you commit.
Many lenders also offer cashback or fee waivers to win your business, which can offset or even exceed these costs. Just make sure the headline rate is genuinely competitive, a big cashback attached to a mediocre rate is rarely a good trade.
Step 3: Check your position as a borrower
A new lender will assess you almost as if you were applying for a brand new loan. Three things matter most:
- Your equity. Lenders look at your loan-to-value ratio (LVR). If your property has risen in value or you have paid the loan down, your LVR may now be below 80%, which unlocks sharper rates and avoids Lenders Mortgage Insurance.
- Your income and expenses. Lenders assess your ability to repay at your actual rate plus a 3% buffer, so keep your spending tidy in the months before you apply.
- Your credit history. Recent missed payments, lots of credit applications, or undisclosed debts can slow things down or reduce your options.
Step 4: Compare loans and choose
Now compare the market. Look beyond the advertised rate to the comparison rate (which includes most fees), the features you actually need (offset account, redraw, the ability to make extra repayments), and any ongoing annual package fee.
This is where a mortgage broker earns their keep. A broker can compare dozens of lenders at once, tell you which ones are likely to approve you, and handle the paperwork. Their service is typically free to you, as they are paid by the lender.
Step 5: Apply and get approved
Once you choose a loan, you submit a full application with supporting documents: payslips, identification, your current loan statements, and details of any other debts. The new lender then orders a valuation of your property and assesses your application.
Conditional approval can come through in a few days. Once the valuation is back and everything checks out, you receive formal (unconditional) approval and the loan documents to sign.
Step 6: Settlement
After you sign and return the documents, the two lenders coordinate behind the scenes. Your new lender pays out the old loan, your old lender discharges its mortgage, and your new loan takes its place over your property. You do not need to do much here other than respond promptly to any requests.
How long does the whole thing take?
From application to settlement, an external refinance usually takes two to four weeks, though it can be quicker if your paperwork is in order and the valuation is straightforward. Staying with your current lender and simply renegotiating your rate (sometimes called a "rate review" or product switch) can take just a few days.
The bottom line
Refinancing is one of the highest-value financial moves an Australian homeowner can make, and most of the work is done for you. Start by checking whether your current rate is competitive. If it is not, the rest of the process is well worn and a good broker can carry most of the load.