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Guide · Refinance

How to refinance — without the bank run-around.

Most Australian borrowers are paying 0.3–0.7% more than they need to. Some of that is loyalty tax. Some is structural — wrong product, wrong lender for your situation. Here's how to tell the difference and what to do about it.

Reviewed · Adam King — 30 years in finance, Sunshine Coast

Why most borrowers are overpaying

Lenders price two things differently: the back book (existing customers) and the front book (new business). Your rate today is almost certainly not the same as the rate the same lender is advertising to win a new customer this week. The gap is usually somewhere between 0.20% and 0.60%. On a $600K loan, 0.40% is $2,400 a year. Over five years that's $12,000 — and that's before you account for the compounding effect on the loan balance. The gap isn't a retention team defending turf; it's the lender's pricing function deliberately keeping the back book on higher rates while it sharpens front-book pricing to win new business. A 15-minute call to ask for a review can sometimes close most of it. Sometimes it can't, and that's when refinancing becomes the move.

Five signs it's time to look

  • Your rate hasn't been reviewed in 18+ months. The market has shifted; your rate hasn't.
  • You're paying for features you don't use — offset accounts, redraw, package fees on a no-frills need.
  • Your fixed rate is rolling off. The revert rate is rarely competitive.
  • Your property value has grown materially. Falling under 80% LVR opens up sharper pricing.
  • Your circumstances have changed — second income, business income, a partner joining the loan.

The hidden refinance: lowering your rate AND your assessment buffer

Plenty of borrowers feel locked into their current lender — not by the rate, but by serviceability. When a lender assesses whether you can afford a new loan, it doesn't test you at your actual rate; it adds a buffer on top. APRA's guidance has lenders applying a 3% buffer to most new lending, and that buffer applies to your existing debts too — so on a $1m loan it can read like a $30,000-a-year phantom expense that simply isn't real. That's what crushes capacity and keeps people stuck. Here's the part most borrowers never hear: for a like-for-like refinance that genuinely lowers your rate and repayments and improves your position, some lenders will assess at a reduced (around 1%) or even 0% buffer — where your repayment history is clean and the new loan is comfortably affordable. It isn't automatic (APRA still expects lenders to lend prudently), and it isn't every lender. But where it fits, it can be the difference between 'computer says no' and a refinance that actually moves you to a sharper rate. Knowing which lenders on a 60+ panel apply it, and when, is exactly the kind of thing worth a conversation before you assume you're stuck.

Making the numbers work

Sometimes the valuation is the lever.

A refinance lives or dies on the property valuation — it sets your LVR, which sets your pricing and whether the deal clears at all. We can sometimes order valuations across different lenders (valuers genuinely disagree, often by 5–10%), request a review with supporting evidence, or pick the lender whose valuation approach suits your property. Where a single number is the thing standing between you and a better loan, it's worth knowing there's usually more than one number available.

Refinancing — your bank vs. a broker

Both can deliver a better rate. They're answering different questions, and the second question is usually the more important one.

ConsiderationWith usDirect with a bank
Lenders considered60+ on panel — major banks, second-tier banks and specialist non-banks across the boardOne — the lender you're already with
Question being answeredWhat's the right loan for the next five years of your life?What rate do we need to offer to stop you leaving today?
Cashback accessWhatever's genuinely live — and right now there's bugger-all in market, so the rate has to carry the case on its ownWhatever your current lender happens to be running, if any — which is almost always nothing
Cost to youNothing — broker is paid by the lender, on the same commission whichever winsNothing on the surface; the retained rate is usually the floor, not the ceiling

The refinance process — step by step

01

Day 1

Position review

We look at your current loan: rate, fees, fixed/variable mix, offset balances, redraw, LVR, repayment history. Twenty minutes. No commitment.

02

Day 2–3

Compare and shortlist

Three lenders, not thirty. Each shortlisted because it actually suits your structure — rate, cashback (if any), policy fit on income type, future plans.

03

Week 1–2

Application and approval

Documents, valuation (almost always desktop or AVM for refinance), lender assessment. Conditional approval is typical inside a week with the right lender.

04

Week 3–4

Settlement

Old loan paid out, new loan funded, direct debits switched, cashback paid (usually 4–8 weeks post-settlement). You don't see paperwork couriered between banks anymore — it's all electronic.

Break costs

If you're on a fixed rate, run the number first.

Breaking a fixed rate isn't free. The bank's calculation is based on the difference between your contracted rate and the current wholesale rate, multiplied by the remaining fixed term. On a $500K loan with 18 months left and a 1.5% gap, the break fee can land at $11,000 or more. Sometimes refinancing still wins. Sometimes it doesn't. The only way to know is to request a formal break quote and model it both ways.

Cashback offers in 2026 — basically gone

If you remember the cashback war of a few years back, forget it. Right now there's bugger-all cashback in the market — we genuinely can't remember the last one worth chasing. The lenders that did pay them have largely pulled them, and the handful still advertising one rarely pair it with a rate sharp enough to come out ahead. So the rate has to carry the case on its own. That's actually cleaner: there's no headline number distracting from the real question, which is rate plus fees over five years. Where a genuine cashback does surface, we'll model it against the no-cashback options and put the actual five-year cost on a single page — but don't refinance for a cashback that isn't there.

What you'll need to lodge

  • Last two payslips (or two years of tax returns if self-employed)
  • Three months of bank statements for your everyday account
  • Six months of statements on your current home loan
  • Most recent council rates notice and insurance certificate
  • Photo ID — driver's licence + Medicare typically does it

Questions you might have

The honest answers.

Real numbers · honest answers

Your rate, *honestly* reviewed.

We'll pull your current loan, model three alternatives, and tell you straight if there's a worthwhile move. No move, no fee, no pressure.

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General information only — not personal credit advice. Rates and figures shown are indicative and subject to confirmation against current lender pricing and policy.