Refinancing · Plain-English guide
Refinancing can get you a loan that suits you better, but it isn’t always as simple as switching to a lower rate. Here’s what to check, what it costs, and how to work out whether it’s worth it.
By Russell Carter, Partnerships Manager at Goodlend. Last reviewed 22 October 2026.
1. Ask your current lender first
Tell your current lender you’re planning to switch to a cheaper loan elsewhere. To keep your business, they may reduce the rate on your current loan. At least 20% equity in your home and a good credit score give you more to bargain with. Compare anything they offer with the other loans you’re considering.
2. Review your current loan
Know what you have: your rate, remaining loan term, fees, and the features you actually use, such as an offset account, redraw or a split. If you’re on a fixed rate, find out whether a break cost would apply. That’s your comparison baseline.
3. Look beyond the rate
A low headline rate is only part of the story. Compare the loan term, ongoing fees and features. A slightly higher rate with features you’ll use may suit you better than a lower one without them.
4. What switching can cost
Break fee
If your current loan is on a fixed rate
Discharge fee
To close your current loan
Application fee
If the new lender charges one
Switching fee
Moving to a new loan with the same lender
Stamp duty
May apply; check with your lender
LMI
If you have less than 20% equity
Paid Lenders Mortgage Insurance on your current loan? If you switch, ask about a partial refund.
5. Work out your break-even point
Divide what switching costs by what it saves you each month. That’s how many months it takes to pay for itself:
Illustrative figures only. Compare repayments on the same loan amount and term.
If you expect to sell or switch again before you break even, it probably isn’t worth it. Prefer a calculator? Moneysmart’s mortgage switching calculator does the comparison for you.
Watch the loan term.
Moving 22 years left onto a new 30-year loan can lower your repayments but cost more interest overall, even at a lower rate. Compare the total interest on both.
6. When switching might not stack up
- You’re planning to sell soon
- You’re in a fixed period and the break cost is high
- You’d have to pay LMI again on the new loan
- The costs outweigh what you’d save before you sell or switch again
We’ll help you check whether refinancing is in your best interests before you apply.
7. Know your goals
Refinancing isn’t only about the rate. You might want lower repayments, a shorter loan term, or to access equity for renovations or an investment. Each goal changes which loan could suit.
What to have ready
- Your latest home loan statement
- Recent income documents (the lender decides exactly what it needs)
- Details of your other debts, including credit card limits and buy-now-pay-later
- Your goal: lower repayments, a shorter term, equity for a renovation, or something else
How Goodlend helps
We compare loans from our panel of over 30 lenders, help you weigh up the costs of switching, and manage the application through to settlement, with e-signatures to cut down the paperwork. You don’t pay us a fee: lenders pay us a commission when your loan settles, and we’ll show you upfront how we’re paid. When your refinance settles, part of our commission goes to a charity you choose, through Shout for Good.
Comparing fixed and variable? Read our fixed vs variable guide. Own in Footscray or the inner west? See our Footscray page.
Goodlend mortgage brokers
Thinking about refinancing? Let us check whether it stacks up.
Start with a conversation about your current loan, your goals and what switching would cost.
General information only. This article doesn’t take into account your objectives, financial situation or needs, and it isn’t credit advice. Any home loan is subject to lender approval and conditions.
Goodlend Mortgage Brokers is a trading name of Gariwed Falls Pty Ltd (ACN 682 875 798) ATF Holvor Investments Unit Trust No. 1, credit representative 556461 of Connective Credit Services Pty Ltd (ACL 389328).
