How to Refinance Your Home Loan in 2026
If you have not reviewed your home loan in the past 12 months, you are almost certainly paying more than you need to. Lenders consistently offer their best rates to new customers while existing borrowers stay on higher rates out of inertia. Refinancing is the single most effective way to reduce your mortgage costs, and in 2026 the process has never been easier.
How Much Could You Save
The savings from refinancing depend on your loan size and the rate difference. Here are realistic examples based on current market rates:
- $400,000 loan, 0.5% rate drop: Save approximately $2,000 per year ($167/month)
- $600,000 loan, 0.5% rate drop: Save approximately $3,000 per year ($250/month)
- $800,000 loan, 0.75% rate drop: Save approximately $6,000 per year ($500/month)
Over a 25-year loan term, even a 0.3 per cent rate reduction on a $600,000 mortgage saves more than $35,000 in total interest.
When to Refinance
Consider refinancing if any of these apply to you:
- Your rate is above the market average: Check our rates page to compare. If your rate is more than 0.25 per cent above the lowest available, you are overpaying
- Your fixed rate is ending: Do not let it automatically revert to the lender's standard variable rate, which is typically the highest rate they offer
- Your financial position has improved: Higher income, less debt, or more equity since you first borrowed may qualify you for a better rate
- You want to access equity: For renovations, investments, or other purposes
- You want better features: Offset accounts, redraw facilities, or more flexible repayment options
Step-by-Step Refinancing Process
- Check your current rate and loan balance: Log into your existing lender's online banking or call them
- Compare the market: Use our calculator or speak to a mortgage broker who can compare 30+ lenders
- Calculate break costs (if fixed): If you are on a fixed rate, ask your lender for a break cost estimate. Variable rate loans have no break costs
- Apply for the new loan: Your broker handles the paperwork. You will need recent payslips, bank statements, and ID
- Valuation: The new lender values your property (usually free or low cost)
- Settlement: The new lender pays off your old loan. This is coordinated between the lenders and typically takes 2 to 4 weeks
Refinancing Costs
- Discharge fee: $150 to $400 from your current lender
- Break costs (fixed rate only): Can be zero or thousands, always check first
- Application fee: Many lenders waive this for refinancers
- Valuation fee: Often free with the new lender
- Settlement fee: Around $200 to $400
Many lenders now offer cashback incentives of $2,000 to $4,000 for refinancers, which can offset all of these costs and leave you ahead from day one.
Common Refinancing Mistakes
- Only looking at rate: A lower rate with high fees or poor features may not be the best deal overall
- Extending your loan term: Refinancing to a new 30-year term reduces repayments but increases total interest paid. Ask your broker to match your remaining term
- Ignoring your offset balance: If you have money in an offset account, factor this into your comparison
- Loyalty to your current bank: Banks rarely give their best rates to existing customers. The best deals go to new borrowers
Why Use a Broker to Refinance
A mortgage broker handles the entire process for you at no cost. They compare dozens of lenders, negotiate rates on your behalf, manage all the paperwork, and coordinate settlement. Most refinances through a broker complete within 2 to 3 weeks with minimal effort on your part.