Many lenders and brokers suggest reviewing your home loan every 1–2 years to check whether your rate, features and structure still suit your needs.
Refinancing may help reduce repayments, access equity, or simplify your loan, depending on eligibility and lender criteria.
Borrowers with higher "loyalty tax" rates may secure a more competitive option by comparing new-to-bank offers and features.
Refinancing can consolidate multiple debts into one repayment, though long-term interest costs must be considered.
An Aussie Broker can compare rates, fees and policies across multiple lenders and guide you through refinance eligibility and documentation.
Interest rates have moved significantly in recent years, and for many households, that's meant higher repayments and tighter cash flow. It's prompted an important question for borrowers: Is my current home loan still the right fit for my financial situation?
Refinancing isn't about switching for the sake of it. It's about ensuring your loan structure, interest rate and features continue to support your goals as the market and your circumstances change.
That's why many lenders and brokers suggest reviewing your home loan every one to two years to see whether a more suitable option is available.
In 2025, refinancing may help you:
Manage repayments if you're paying more than new-to-bank customers
Access any equity you've built through repayments or property value changes
Adjust your loan features or type to better suit your budget and flexibility needs
Simplify your loan setup, reduce fees or consolidate debts
Refinance processes have also become more streamlined across many lenders, particularly for straightforward applications- but suitability still depends on factors such as your equity position, income, credit profile, and each lender's criteria.
This guide breaks down eight practical reasons Australians consider refinancing, what to weigh up, and how an Aussie Broker can help you compare options with confidence.
1. Secure a lower interest rate.
After several years of sharp RBA cash rate movements, the 2024–2025 market remains volatile.
Many borrowers, especially those who fixed at record-low rates, have now rolled onto higher variable or revert rates. For some households, these shifts mean paying more than new customers for the same type of loan. This makes regular home loan reviews essential. A rate that suited you in 2021 or 2022 may no longer reflect current market pricing or your financial position.
Existing borrowers also often pay higher rates than new-to-bank customers. This "loyalty tax" is one of the main reasons homeowners consider refinancing, as switching can help you reset your rate and avoid paying more simply because you've stayed with your current lender.
Small rate changes can have a long-term impact. A rate reduction of even 0.25% or 0.50% can create meaningful savings over the life of your loan, depending on your balance and remaining term. To compare options properly, always look at the comparison rate, which reflects the interest rate plus certain fees tied to the loan.
Some lenders also offer refinance cashback offers from time to time. These offers can help offset switching costs, but they change frequently and come with eligibility criteria. Cashback shouldn't be the only consideration when weighing up a refinance.
Note: Terms and conditions apply. Cashback offers are provided directly by some lenders and may be available only for specific loan products.
You also have to watch out for revert rates on fixed loans. If your fixed rate expired recently, you may have been moved to a higher revert rate. Refinancing can help you transition to a more competitive variable rate or explore a split loan, depending on your goals and each lender's criteria.
To weigh your options properly, compare more than just the rate. A lower headline rate doesn't always mean a better loan. Review:
Annual or ongoing fees
Offset account availability
Break costs if leaving a fixed loan
Digital banking experience
Access to support from a broker when you need it
Taking a holistic view helps ensure you're switching to a loan that suits your budget and repayment style, not just the cheapest rate on paper.
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2. Add or remove home loan features.
Your personal circumstances will likely change over the course of your home loan, and you may need to alter your loan accordingly. Refinancing can help you align your loan features with how you really use your money. Here are some of the features borrowers commonly reassess:
Offset and redraw flexibility
Many lenders now combine offset accounts with redraw facilities, giving borrowers more control over how they manage savings, reduce interest and access funds when needed. Refinancing can open the door to loan structures that offer greater day-to-day flexibility.
Repayment frequency and extra-repayment options
Switching from monthly to fortnightly repayments (or vice versa) can make budgeting easier depending on your income cycle. Some borrowers also look for loans that allow extra repayments at any time without penalties, especially if they want to pay down their balance faster.
App-based and digital loan management
Digital-first lenders continue to expand their tools, from real-time repayment tracking to instant redraw and in-app budgeting features. Refinancing can give you access to a more responsive digital experience, which may be helpful if you want clearer visibility over your loan and spending.
Moving between fixed and variable rates
Suppose you're coming off a fixed rate and want more flexibility (such as making extra repayments or accessing redraw). In that case, a refinance may help you transition to a variable or split structure that better matches your current goals. Likewise, borrowers seeking greater certainty may consider moving from a variable to a fixed rate, subject to lender criteria and break costs, where applicable.
Whatever your needs, you could refinance to change the terms of your home loan.
Note: If you're switching from a fixed-rate loan, be sure to check whether exit or break costs apply.
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3. Pay less in fees.
Are home loan fees becoming a pain in your hip pocket? Refinancing to a low ongoing fee or simpler home loan structure could be the answer. Be sure to check whether the home loan you want to switch to doesn't make up for having low fees by charging a high interest rate.
Some of the typical charges to check include:
Annual package fees: Common on bundled home loans that include offset accounts or credit card benefits. These fees can offer value for some borrowers, but may be unnecessary if you don't use the extras.
Monthly account-keeping fees: These charges vary by lender and product type. Some modern loan options no longer charge a monthly fee, reducing ongoing costs.
Discharge fees: Your existing lender may charge a discharge or settlement fee when you leave your current loan. The amount is usually small, but it's still worth factoring into your comparison.
Application or establishment fees: Not all lenders charge them, but some do, particularly on loans with more features or complex structures. These can affect your upfront switching cost.
Looking at the interest rate alone won't show you the full cost of a loan. Understanding both your current fees and the fees attached to a new loan gives you a clearer view of the true cost of refinancing and helps you compare options more accurately.
How does Aussie help? An Aussie Broker can break down fees, features and comparison rates across multiple lenders so you can clearly see how each option stacks up over time. They'll walk you through the trade-offs, explain where costs differ, and help you understand whether refinancing to a simpler or lower-fee structure could be worthwhile for your circumstances.
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4. Tap into your equity.
Despite periods of volatility, property values in many areas have increased since 2020, though conditions vary by region and property type. That means many homeowners may now hold more usable equity than they realise. If your home's value has increased (or you've paid down a significant portion of your loan), refinancing can be a structured way to tap into that equity to achieve new goals.
Equity release is commonly used for renovations, investment planning, or debt consolidation, as long as it fits your borrowing capacity and a lender's criteria.
Equity is the portion of your home you own outright. It's calculated as:
Equity = Property's current market value – Outstanding home loan balance
For example, a property valued at $900,000 with a $520,000 loan balance equals $380,000 in equity.
Only some of this may be usable. Lenders usually allow borrowing up to a set percentage of your home's value, which determines how much equity you can access through a refinance.
Borrowers typically release equity for:
Home upgrades, such as kitchen or bathroom renovations, or energy-efficient improvements.
Property investment, using equity as a deposit on an investment purchase.
Debt consolidation, combining debts into one home loan to simplify repayments (long-term costs and affordability should be assessed carefully).
Major expenses, including education costs, vehicles or other large purchases.
All uses depend on lender requirements, your borrowing power and how the funds will be applied.
Remember, accessing equity increases your loan size, which raises repayments and may extend your loan term. Because you're borrowing against your home, it's important to consider long-term affordability and financial stability before proceeding.
Refinancing can allow you to access equity through:
A top-up on your current loan
A separate split loan dedicated to renovations or investment
A full refinance with a new lender offering different features or pricing
The right structure depends on your goals, income, property value and each lender's criteria.
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5. Change to a fixed rate, variable rate or split rate loan.
Significant cash rate movements since 2022 (and ongoing uncertainty in 2025) mean the rate type you chose when you first borrowed may no longer match your budget, goals or risk appetite. Refinancing gives you the option to move to a fixed, variable or split rate structure that better reflects how you plan, save and manage repayment changes.
Homeowners commonly reassess their rate type when:
Their fixed rate is ending, and the revert rate is much higher
They want more predictable repayments
They want the flexibility to make extra repayments or access redraw
Uncertainty around future rate movements is affecting their budget
They want a mix of stability and flexibility through a split loan
The right choice depends on how you manage money, how sensitive your budget is to shifts in repayment, and your broader financial plans.
Loan type | Pros | Considerations |
|---|---|---|
Predictable repayments for a set term Protection if rates rise Useful for long-term budgeting | Limited ability to make extra repayments Redraw/offset access may be restricted (varies by lender) Break costs may apply if you exit early | |
Freedom to make extra repayments Usually includes offset and redraw Potential benefit if rates fall | Repayments rise if rates increase Less certainty for long-term budgeting | |
Combines fixed-rate certainty with variable-rate flexibility Helps smooth repayment changes | Some repayment fluctuation still applies More complex to understand and track |
With rate movements harder to predict, many borrowers consider splitting their loan. A split places part of your balance on a fixed rate and part on a variable rate, helping balance:
Predictable repayments on the fixed portion
Access to features like offset or redraw on the variable portion
Protection against fully committing to one rate type
A note on break costs: If you are exiting a fixed-rate loan before the term ends, break costs may apply. These depend on your lender, the remaining fixed period and how interest rates have shifted. Your broker can outline these upfront so you understand the implications before making a decision.
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6. Switch lenders.
A competitive rate matters, but the lender behind your loan and the support they provide can be just as important. Suppose you're dealing with slow responses, limited flexibility or outdated digital tools. In that case, refinancing can be a way to switch to a lender whose services, features, and technology better fit your financial needs. You may consider switching if you're experiencing:
Poor or inconsistent customer service: Long wait times, slow issue resolution, or difficulty getting clear answers can erode confidence.
Limited repayment flexibility: If it's hard to change repayment frequency, make extra repayments or use redraw, you may feel constrained.
Outdated or basic digital features: Many borrowers now expect an intuitive app, fast redraw access and clear loan visibility. Not all lenders offer these tools.
In-person support that falls short of expectations: Some borrowers want the option to speak with someone face-to-face when making major financial decisions.
Ethical or sustainability considerations: You may prefer your loan to sit with a lender whose practices align more closely with your values.
As digital platforms and lending models evolve, borrowers now have more choices than they once did. Digital-first lenders have introduced faster processes and simplified products, with features such as:
Quicker refinance approval pathways
Modern app-based loan management
Competitive interest rates and fewer ongoing fees
Streamlined application forms and document uploads
These can suit borrowers who value speed, clarity and strong digital tools. However, they may not be right for everyone, depending on borrowing needs, service expectations or individual lender criteria.
A lower rate is only valuable if the lender's service, flexibility and tools support how you manage your loan. When comparing lenders, consider:
How much support you want day-to-day
Whether you prefer digital-first or in-person service
How important flexible repayments and features are
The lender's track record for customer service
A simple practice: Weigh service, features and support just as seriously as the rate itself. Government sites like Moneysmart offer neutral, easy-to-understand information about refinancing and switching lenders. They're a useful reference point when starting your research.
7. Consolidate debt.
Refinancing to consolidate debt can be a smart option for borrowers with other debts, such as personal loans, car loans, and credit cards.
Debt consolidation involves combining other debts with your home loan. This way, you make a single consolidated repayment instead of managing multiple separate debts.. Home loan interest rates are often lower than rates on other debts, so the interest rate on consolidated balances may be lower. However, this doesn’t guarantee a lower overall cost, especially if the term is extended.
This approach can:
Streamline your monthly budgeting
Reduce the stress of multiple due dates
Potentially lower the rate applied to your higher-interest debts
Debt consolidation through refinancing may be appropriate if:
You're juggling several higher-interest debts
You want a single, clearer repayment structure
You can commit to consistent repayments
You understand the long-term cost implications
Your borrowing capacity meets lender criteria
Every scenario depends on lender approval, serviceability, and your ability to manage repayments over time. However, while consolidation can feel like immediate relief, it doesn't always lead to lower total interest costs. A few factors to keep in mind:
You may extend the term of your debt. Moving short-term debt (such as a car loan or credit card debt) into a 20–30-year mortgage can increase the total interest paid over time.
Your total interest paid may increase. Even at a lower rate, stretching the repayment period can increase the overall cost.
For example, consolidating a $10,000 car loan into your mortgage may reduce the monthly repayment. Still, you could pay more interest overall if it's repaid over decades rather than a few years.
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8. Reduce or extend your home loan term.
Sometimes, your circumstances mean that your home loan term isn't right for you anymore. You can extend or reduce your home loan term by refinancing.
If your financial position has improved (through higher income, reduced expenses or stronger savings habits), you may be in a position to make higher repayments.
Refinancing into a shorter loan term can help you:
Pay off your home sooner
Reduce the total interest paid over the life of the loan
Avoid certain charges that may apply if you repay a fixed loan early
Shorter terms mean higher monthly repayments, but the long-term interest savings can be meaningful if it fits your budget.
On the other hand, higher interest rates and rising living costs have tightened cash flow for some households. Refinancing to extend your loan term can temporarily lower your repayments and create breathing room. However, there's a clear trade-off.
If your household budget is stretched, refinancing to extend your loan term may temporarily reduce repayments, but this generally increases total interest over the life of the loan. This can help stabilise cash flow in the short term, but it should be weighed against the full long-term costs.
Short term vs long term: An illustrative comparison
Note: This example is for illustration only. Actual outcomes depend on your loan amount, interest rate, fees and personal circumstances.
Loan term | Monthly repayment | Total interest paid | |
|---|---|---|---|
Shorter term | 20 years | Higher | Lower |
Longer term | 30 years | Lower | Higher |
The comparison highlights the key balance: short-term repayment relief vs long-term cost.
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What do I need to qualify for a home loan refinance?
Refinancing isn't just about finding a lower rate; your new lender will still need to confirm that you meet their eligibility and serviceability criteria.
With interest rates rising in recent years, many lenders have tightened parts of their assessment processes, particularly around income, expenses and repayment history.
Most lenders will look closely at the following:
Your equity position: Many lenders prefer borrowers to hold around 20% equity. You may still be able to refinance with less, but Lenders Mortgage Insurance (LMI) may apply depending on the lender and your circumstances.
Income and serviceability checks: Lenders assess your income, expenses, assets and liabilities to confirm you can comfortably manage the refinanced loan. Many lenders apply a serviceability buffer, often around 3 percentage points above your actual rate - but exact buffers vary by lender and may change over time.
Your credit score and repayment history: A strong credit score and steady repayment history support your application. Missed or late payments can affect eligibility, but each lender applies its own criteria.
Loan documentation: You'll usually need recent payslips and employment verification, bank statements, identification, and current home loan statements and contract details.
Your overall financial position: Lenders review spending patterns, recurring commitments and any financial changes since your original loan was approved.
At the same time, more lenders now offer streamlined, digital-first refinance pathways, which can speed up approvals for borrowers who meet the criteria.
Several lenders now offer digital or fast-track refinancing processes that can reduce paperwork and shorten approval timeframes. These are typically suited to straightforward applications where eligibility criteria are easily met.
How does an Aussie Broker help you navigate eligibility? An Aussie Broker can:
Explain which lenders you may qualify with
Guide you through the documents you'll need
Check borrowing capacity and serviceability
Compare refinance options across multiple lenders
They'll help you understand what's achievable and which options align with your goals so you can move forward with confidence.
Is refinancing the right move for you?
Refinancing can be a useful way to take more control of your home loan, whether you're aiming to reduce repayments, unlock equity, update your loan features or find a lender that better meets your expectations. The right approach depends on your income, equity, spending patterns, and how comfortable you are with potential changes to your repayment terms over time.
With more digital options in the market and clearer pathways to compare lenders, it's now easier to understand what's available. The key is making a decision grounded in your circumstances, not just headline rates.
If you're unsure where to start, guidance matters. An Aussie Broker can review your current loan, check your eligibility across multiple lenders and explain how different refinance options could affect your budget both now and in the long term. They'll help you weigh up the trade-offs and move forward with confidence.
Book a free^ chat with an Aussie Broker today and get expert help assessing whether refinancing is the right step for your financial goals.