Thinking of refinancing? A checklist before you switch
Updated: 2 days ago
Checked 28 September 2026 · About 6 minutes
In brief
A lower rate only helps if it still wins after the costs of switching.
Ask your current lender first. A rate review can save you the paperwork.
A new lender will reassess you at the new loan's rate plus a buffer of at least 3 percentage points. Your borrowing power may be lower than when you first borrowed.
Keep the loan term close to what you have left, or a lower repayment can still cost more interest.
Start with why you want to refinance
The right comparison depends on what you want to achieve: less interest, lower repayments, better features, a change between fixed and variable, access to equity, or a new structure for a change in plans. Being clear on the goal first stops a headline offer from making the decision for you.
Ask your current lender first
Moneysmart's first tip is to ask your current lender for a better deal. Tell them the rate you have been offered elsewhere. If they match it, you keep your accounts, your offset and your direct debits where they are.
Add up the cost of switching
Switching fees vary by lender and loan. The main ones are:
Break costs on a fixed-rate loan, which can be large if rates have moved since you fixed.
A discharge fee from your current lender.
Application, valuation or settlement fees at the new lender, unless they are waived.
Government fees to register the new mortgage and release the old one. In Queensland, Titles Queensland charges a lodgement fee for each ($248.04 in 2026–27; the fees are updated every financial year).
Lenders mortgage insurance (LMI) if you will owe more than 80% of the property's value. You may have to pay it again, even if you paid it on your current loan.
Weigh any cashback against these costs and against the rate over the years ahead, not the first few months.
Work out the break-even point
Divide the upfront cost of switching by the monthly saving. The answer is roughly how many months it takes before the refinance starts to pay off. If you might sell or refinance again before then, the switch may not be worth it. Moneysmart's mortgage switching calculator can help with the sums.
Expect to be reassessed
A new lender has to assess your application as if it were a new loan. Banks test your repayments at a rate at least 3 percentage points above the new loan's rate, and your income, expenses and debts are checked again.
If rates have risen or your circumstances have changed since you first borrowed, you may not qualify for the same amount again. APRA allows banks limited room to make exceptions for like-for-like refinances, such as taking your repayment history into account. Some lenders use it and some don't, so it pays to compare.
Don't let the term creep out
If you have 22 years left and refinance over 30, your repayment drops but you pay interest for eight more years. Moneysmart suggests keeping the new term similar to what is left on your current loan. You can also keep paying your old repayment amount.
If you want to access equity
A refinance can sometimes release equity for a specific purpose, such as renovations. How much is available depends on the valuation, your total lending, the loan-to-value ratio, your servicing and the lender's policy. Larger or less defined amounts usually need more evidence.
Consolidating debts needs extra care
Rolling credit cards or personal loans into your mortgage can lower the monthly repayment. But spreading a short-term debt over many years can increase the total interest, and it turns unsecured debt into debt secured against your home. Our debt consolidation page covers this in more detail.
Check your features work
In July 2026, ASIC reported that eight banks had paid more than $55 million in compensation, between September 2023 and August 2025, because offset accounts were not set up or linked properly. Whether you switch or stay, check that:
your offset account exists and is linked to the right loan split;
your statements show interest being reduced by the offset balance;
redraw, repayment frequency and any split between fixed and variable are what you asked for.
Your refinancing checklist
Your current rate, balance, years left and repayment amount
A quote from your current lender after asking for a review
A break cost quote, if any part of the loan is fixed
The discharge fee, and the new lender's fees
Your property's likely value, to check whether you will owe more than 80%
Your last two payslips or recent tax returns, and three months of statements
Common questions
How often should I review my home loan?
There is no set rule. A review once a year, and whenever your circumstances change or a fixed rate is about to end, is a sensible habit.
Will refinancing automatically reduce my repayments?
No. It depends on the new rate, the term and the fees. A longer term lowers the repayment but can increase the total interest.
Do I need to change lenders to get a better outcome?
Not always. Your current lender may offer a better rate or product when you ask, which saves the cost and effort of switching.
Try the numbers
Use our Repayments calculator to compare repayments at the new rate over the same term, and Property Fees for government charges.
Talk it through
Sources
Moneysmart, switching home loans, updated 29 July 2026
ASIC, offset account failures (26-173MR), 29 July 2026
APRA, exceptions to serviceability policy for refinancers, 9 June 2023
APRA, APG 223 Residential Mortgage Lending, 19 June 2025
Titles Queensland, registry fees 2026–27
General information only. This article does not take into account your objectives, financial situation or needs. Your full financial situation and requirements must be considered before any offer or acceptance of a loan product. All lending is subject to the lender's assessment and criteria, and fees and charges apply. Figures and rules are correct as at the checked date shown and can change.
Avantgarde Financial Brokerage Pty Ltd, Corporate Credit Representative 580346, authorised under Australian Credit Licence 389328 held by Connective Credit Services Pty Ltd.
