What Is a Home Loan Refinance?
Refinancing your mortgage means replacing your current home loan with a new one that offers a lower interest rate, shorter term, or better repayment flexibility.
Australian homeowners often refinance to reduce repayments, access equity, or switch to a lender with better features. View More
Key Benefits of Refinancing Your Home Loan in Australia
- Lower Interest Rates
Mortgage rates in Australia have fluctuated in recent years. Refinancing when rates drop can save you thousands of dollars annually. - Reduced Monthly Repayments
A small rate cut — even 0.5% — can significantly reduce your monthly payments. - Access Home Equity
Use your property’s increased value to fund renovations, invest, or consolidate debt through a cash-out refinance. - Switch to a Better Lender
Many Australians refinance to get improved customer service, flexible redraw options, or offset accounts.
When Is the Best Time to Refinance?
| Situation | Why You Should Refinance |
|---|---|
| Interest rates have fallen | Lock in a lower rate and save |
| Fixed rate term is ending | Switch before it reverts to a higher variable rate |
| Your property value has increased | Unlock home equity for renovations or investments |
| You’ve improved your credit score | Qualify for better deals from top lenders |
Step-by-Step: How to Refinance a Mortgage in Australia
- Check your current loan terms – Understand your rate, remaining balance, and fees.
- Compare lenders – Use platforms like Canstar, RateCity, or Finder to compare refinance rates.
- Apply for pre-approval – Submit documents like income proof, property valuation, and ID.
- Property valuation – Your lender will reassess your home’s market value.
- Loan approval & settlement – Your new lender pays off the old loan, and you begin repayments under your new agreement. View More
Things to Watch Before Refinancing
- Check exit fees or break costs if you’re on a fixed-rate loan.
- Watch for application and valuation fees from the new lender.
- Extending your loan term may lower monthly repayments but increase total interest paid.
- Ensure you’re refinancing for genuine savings, not short-term relief.
Example: How Much Can You Save?
Suppose you have a $600,000 home loan at 6.5% interest with 20 years left.
If you refinance to 5.9%, you could save over $200 a month, or around $48,000 across the life of the loan.
Best Home Loan Refinance Options in Australia (2025)
| Lender | Average Variable Rate | Key Benefits |
|---|---|---|
| Commonwealth Bank (CBA) | 5.89% p.a. | Trusted major bank, multiple offset accounts |
| Westpac | 5.95% p.a. | Great for flexible repayments |
| ANZ | 5.99% p.a. | Easy online refinance process |
| NAB | 5.85% p.a. | No application fee offers available |
| Macquarie Bank | 5.79% p.a. | Competitive rates and quick approval |
(Rates as of November 2025; subject to change.)
Expert Tips to Get the Best Refinance Rate
- Maintain a credit score above 700
- Avoid applying with too many lenders at once
- Use a mortgage broker for exclusive deals
- Negotiate on application and settlement fees
- Review comparison rates, not just advertised rates
Final Thoughts
Refinancing your mortgage in Australia can be one of the smartest financial moves you make.
With the right lender and timing, you can lower repayments, access home equity, and save tens of thousands of dollars over your loan’s lifetime.
Always compare rates, calculate your savings, and refinance smartly.
