Refinancing Your Home Loan: When It's Worth It
schedule5 min read
Refinancing means switching your existing home loan to a new one — often to get a better rate. Done at the right time it can save thousands, but it's not always worth the switch. Here's how to tell.
Common reasons to refinance
- Get a lower interest rate and reduce repayments.
- Access equity in your home for renovations or investment.
- Consolidate other debts into your home loan.
- Switch to features like an offset account or redraw.
The costs to watch
Refinancing isn't free. Before switching, weigh these against your savings.
- Discharge fee from your current lender.
- Application or settlement fees with the new lender.
- Possible LMI again if your equity is below 20%.
When does it make sense?
As a rule of thumb, if the rate saving outweighs the switching costs within a reasonable period, refinancing is worth a closer look.
lightbulbKey Takeaways
- check_circleRefinancing can lower repayments or unlock equity.
- check_circleAlways factor in discharge, application and possible LMI costs.
- check_circleA broker can compare 30+ lenders to find the real saving.
This article is general information only and does not take into account your personal circumstances. Speak with a qualified mortgage broker for advice specific to you.
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