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Refinancing
Lenders reprice their back books. We review yours every year without waiting to be asked.
Refinancing
Refinancing, and the loyalty tax nobody tells you about
Lenders price new business more sharply than existing business. A loan settled three years ago is rarely on the rate that same lender would offer a new customer today, and the gap is commonly 0.3% to 0.8%. On a $700,000 loan, 0.5% is around $3,500 a year. Refinancing takes four to six weeks and costs a few hundred dollars in discharge and registration fees, often offset by a lender cashback.
The single most valuable thing we do for existing clients costs them nothing and they do not have to ask for it. We diarise every settlement anniversary and review the rate against the market each year.
Most people refinance when something forces them to, usually a fixed rate expiring. By then they have often spent two or three years on a rate that drifted. The fix is a calendar entry, and we keep it.
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Refinancing
What we can help you with
Rate Comparison Across 30+ Lenders
Your current rate against what the market will actually write today, not against an advertised headline.
Fixed Rate Expiry Management
We contact you before the fixed term ends, not after you have reverted to the standard variable rate.
Cashback Offers
Lender cashbacks come and go. Where one is available and the rate still stacks up, it can cover the switching costs entirely.
Equity Release
Access equity for a deposit, a renovation or a business purpose, structured so it does not damage servicing.
Debt Consolidation
Rolling higher interest debt into the mortgage lowers the repayment but extends the term. We model the real cost.
Structure Changes
Adding an offset, splitting fixed and variable, or moving between interest only and principal and interest.
What the loyalty tax actually costs
Lenders compete hardest for new borrowers. Existing borrowers are repriced more slowly and less generously, which is how a competitive rate becomes an uncompetitive one without anything visibly changing.
| Rate gap | Extra interest per year | Over 3 years | Over 5 years |
|---|---|---|---|
| 0.25% | $1,750 | $5,250 | $8,750 |
| 0.50% | $3,500 | $10,500 | $17,500 |
| 0.75% | $5,250 | $15,750 | $26,250 |
| 1.00% | $7,000 | $21,000 | $35,000 |
Illustrative, calculated on the interest component of a $700,000 balance and ignoring amortisation. Actual savings depend on your balance, term and repayment type. Not a quote.
Against those figures, the cost of switching is usually a discharge fee of $300 to $400, a mortgage registration fee of a few hundred dollars, and sometimes a valuation. Where a lender cashback is available, the switching costs are frequently covered entirely.
When refinancing is not worth it
We will tell you when it is not. Break costs on a fixed rate can be substantial and are calculated on the lender funding position rather than a fixed formula, so they need to be quoted before any decision. If your loan balance is small, the saving may not justify the disruption. And if your current lender will match the market, a pricing request costs nothing and takes a week. We try that first.
The six reasons people refinance
1. A fixed rate is expiring
The single best time to review, because there are no break costs and the reversion rate is almost always uncompetitive. We contact clients before the expiry rather than after, because the month it rolls off is when the lender switches you to the standard variable rate automatically.
2. A legacy rate has drifted
Nothing happened, which is the point. The lender simply repriced new business more sharply than yours. This is the most common case and the easiest to fix.
3. Equity release
Your property has grown and you want to use that equity as a deposit, for a renovation, or for a business purpose. Usable equity is generally 80% of the current valuation less the existing loan, not the full gap between value and debt.
4. Debt consolidation
Rolling a car loan, personal loan or credit card debt into the mortgage cuts the monthly repayment sharply, because mortgage rates are lower and the term is longer. That second part is the catch: a $30,000 debt over 25 years at a mortgage rate can cost more in total interest than the same debt at a higher rate over five years. We model the real cost rather than just the repayment reduction.
5. Structure changes
Adding an offset account, splitting between fixed and variable, or moving between interest only and principal and interest. Sometimes these can be done with the current lender. Sometimes the current lender does not offer what you need.
6. Your circumstances have changed
A separation, a new business, a change from PAYG to self-employed, or a new child changing household expenses. Each of those changes which lender suits you, and the loan you took out three years ago was chosen for a different life.
Debt consolidation, with the maths visible
This is the area where the sales pitch and the arithmetic disagree most often, so here is the arithmetic.
| Keep as is | Roll into the mortgage | |
|---|---|---|
| Car loan $25,000 at 9.5% over 4 years | $628 per month | |
| Credit cards $20,000 at 19.9% | $500 per month minimum | |
| Combined monthly repayment | $1,128 | |
| Same $45,000 at 6.0% over 25 years | $290 per month | |
| Monthly cash flow improvement | $838 | |
| Total interest paid, original terms | Roughly $12,700 | |
| Total interest paid over 25 years | Roughly $42,000 |
Illustrative only. Actual figures depend on rates, terms and repayment behaviour. Not a quote.
The monthly saving is real and can be exactly what a household needs. The long-run cost is also real. The way to get the benefit without the cost is to consolidate and then keep paying something close to the old combined repayment, which clears the consolidated portion in about four years rather than twenty five.
We set that up as a separate loan split so the consolidated debt is visible and can be attacked separately, rather than disappearing into a single balance where nobody can see it again.
What refinancing costs and what to watch
| Cost | Typical amount | Notes |
|---|---|---|
| Discharge fee, outgoing lender | $300 to $400 | Almost always applies |
| Mortgage registration and deregistration | $200 to $400 | State government fees, vary by state |
| New lender application or settlement fee | $0 to $600 | Frequently waived on a refinance |
| Valuation | $0 to $600 | Often free on a refinance, ordered upfront |
| Break costs on a fixed loan | Can be thousands | Quoted by the lender, calculated on their funding position |
| Lender mortgage insurance, if above 80% | Can be thousands | Not transferable between lenders, so it is paid again |
| Lender cashback, where available | Often $2,000 to $4,000 | Comes and goes. Where offered, usually covers the costs |
Indicative ranges at September 2026. Fees vary by lender and state and change over time. Not a quote.
The two traps
Refinancing above 80% of value. Lender mortgage insurance is not transferable. If you paid it once and refinance above 80% with a new lender, you pay it again. That usually makes refinancing above 80% uneconomic unless the rate gap is very large.
Resetting the term. Refinancing to a new 30 year term on a loan with 22 years left reduces the repayment and increases the total interest substantially. Keep the remaining term unless you have a deliberate reason not to, and we will set it that way by default.
The annual review, which is the actual service
Refinancing is a transaction. The service is making sure it happens at the right time, every time, without you having to think about it.
We diarise every client settlement anniversary. Each year we pull the current rate, compare it against what the market will write today, and either request a repricing from the existing lender or recommend a move. Most years it results in a phone call to the existing lender and a better rate without any paperwork at all.
Where a fixed rate is involved, we contact you two to three months before expiry, which is the window where you have options and no break costs. After it reverts, you are on the standard variable rate and the conversation is a rescue rather than a plan.
None of this costs anything. It is how we keep clients for fifteen years instead of five.
The process
How a refinance runs
Four to six weeks from application to settlement is typical. The outgoing lender discharge process is usually the longest step and is largely outside anyone control, which is why we start it early.
- 1Day 1, 30 minutes
Review call
Your current rate, balance, lender, loan type and whether anything has changed in your circumstances. We will tell you on this call whether a refinance is likely to be worth it.
- 2Days 1 to 3
Pricing request first
Before recommending a move, we ask your existing lender to reprice. It costs nothing and takes about a week. Sometimes it solves the problem without any paperwork.
- 3Days 3 to 7
Market comparison
Where a move makes sense, we compare the panel on rate, fees, cashback availability, offset features and how your income is assessed.
- 4Week 2
Application and valuation
Submission with supporting documents. Valuations on a refinance are often free and ordered upfront, and an upfront valuation avoids a nasty surprise later.
- 5Week 2 to 3
Approval
Unconditional approval, then loan documents. We check the rate, the term and the structure against what was recommended, particularly the loan term, which lenders default to 30 years.
- 6Week 3 to 5
Discharge from the outgoing lender
The discharge authority goes to the old lender, which typically takes two to three weeks. This is the slowest step and the one we chase.
- 7Week 4 to 6
Settlement
The new lender pays out the old one. We confirm the first repayment, the rate and any offset account are all correct after settlement rather than assuming.
- 8Every 12 months after
Annual rate review
We diarise the anniversary and review the rate against the market every year, unasked. Most years it is a repricing request rather than another refinance.
FAQ
Common questions about refinancing
Answers to the questions we are asked most often. If yours is not here, ask us directly.
It depends on the gap between your current rate and what the market will write today, which is commonly 0.3% to 0.8% on a loan a few years old. On a $700,000 balance, 0.5% is around $3,500 a year. We quote the actual figure for your loan rather than a headline.
Four to six weeks from application to settlement is typical. The discharge process at your outgoing lender usually takes two to three weeks and is the slowest step, so we lodge the discharge authority as early as the process allows.
Usually a discharge fee of $300 to $400, mortgage registration and deregistration fees of a few hundred dollars, and sometimes a valuation. Many lenders waive their own application fees on refinances. Where a cashback offer is available it frequently covers the lot.
Yes, and we do it for you before recommending anything. A pricing request costs nothing, takes about a week and often gets most of the way there without any paperwork. We only recommend moving where the market is clearly better than what your lender will match.
A charge for exiting a fixed rate early, calculated on the lender funding position rather than a fixed formula, which is why it cannot be estimated reliably in advance. It can be thousands or it can be almost nothing depending on where rates have moved. Always get the figure quoted by the lender before deciding.
You can, but it is often uneconomic, because lender mortgage insurance is not transferable between lenders. If you paid it once and refinance above 80%, you pay it again. Unless the rate gap is very large, waiting until the balance is under 80% is usually better.
A refinance application creates a credit enquiry, which has a minor and temporary effect. Multiple applications in a short period have a larger effect, which is why we submit to one lender rather than shopping an application around several at once.
Yes, subject to servicing and to staying within 80% of the current valuation to avoid lender mortgage insurance. Usable equity is 80% of value less your existing loan, not the full gap. Lenders will also ask what the funds are for, and the stated purpose affects both the assessment and the tax treatment.
It improves monthly cash flow, sometimes dramatically, but stretching short term debt over 25 years increases total interest substantially. The way to get the benefit without the cost is to consolidate into a separate loan split and keep paying close to the old combined repayment. We set it up that way by default.
Only if you let it happen. Lenders default new loans to 30 years, which lowers the repayment and increases total interest. Unless you have a deliberate reason to extend, we set the new loan to match your remaining term.
Yes, and the same arithmetic applies. Two extra considerations: the deductibility of interest depends on the purpose of the borrowing, so an equity release for private purposes should be a separate split, and lenders vary in how they assess your rental income and existing portfolio debt.
Generally your last two payslips, your most recent loan statements covering six months, rates notices for the properties, ID, and for self-employed applicants two years of tax returns and financial statements. Less than a full purchase application, because there is no contract of sale.
Only where the rate stacks up on its own. A $3,000 cashback on a rate that is 0.4% worse costs you more than it pays within two years on a typical balance. We treat a cashback as a tiebreaker between good options rather than a reason to choose a lender.
Every year. Lenders reprice their back books continuously and the gap opens gradually rather than suddenly. We diarise every client settlement anniversary and run the review without being asked, which is the only way it actually happens consistently.
Note the date and start the conversation two to three months before it. That is the window where you have options and no break costs. After it reverts you are on the standard variable rate, which is usually well above market, and every month there costs money.
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Liam Jalilian2 months ago
I had an excellent experience working with LoanBuddy (Shane) mortgage broker. From the beginning, he was professional, knowledgeable...
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