Refinancing is usually discussed as a question of finding a better rate. It is more precisely a question of four numbers, and once you have them the decision tends to make itself.
Number one: what your current lender will do
Before anything else, compare what you pay against what your own lender advertises to new borrowers, then ask them to match it.
A repricing request is free, takes days rather than weeks, and involves no application, no valuation and no credit enquiry. Whatever they come back with is the floor: any switch now has to beat that number, not the number you were paying last week.
Number two: the total switching cost
Get it in writing, and get all of it:
- Discharge fee from the outgoing lender
- Application or settlement fee at the incoming lender
- State government registration and transfer charges
- Break cost on any fixed portion — calculated at the time, not published in advance, so you have to request the figure
Number three: the break-even month
Total switching cost divided by the monthly saving. That is how many months before you are ahead.
It is a short calculation that settles a lot of arguments. If you might sell, move or refinance again before that month arrives, the saving never does either. If a cashback is in the picture, subtract it from the switching cost first — then check the clawback period in the terms, because a cashback that must be repaid if you leave within two years is a lock-in with a payment attached.
Number four: today’s loan-to-value ratio
Your loan balance divided by the property’s current value.
If the property has appreciated and you are now under 80%, a whole tier of pricing opens and mortgage insurance leaves the equation — frequently a bigger effect than the rate difference you started out chasing. If it has moved the other way, that is worth knowing before an application rather than during one.
Two things worth deciding deliberately
The term. A loan with 22 years left, refinanced back to 30, has a lower monthly payment and a considerably higher total cost. If the goal is a lower rate, keep the remaining term.
Your evidence. A refinance is a fresh assessment against today’s position, not the one you were approved on. New business, contract role, larger credit card limit — all of it is reassessed.
The full sequence is on the refinance checklist, and the wider lane is here. Method source: Moneysmart — switching home loans, published by ASIC.
Reviewed 17 August 2026.