Better pricing
Has your rate quietly drifted?
If your loan is a few years old, or your LVR has fallen as the balance dropped and the value rose, you may sit in a materially better pricing band than the one you are being charged.
REFINANCING
Refinancing, when the numbers justify it
Switching lenders is not automatically a win. Here is how to tell whether yours is one of the cases where it is.
IN SHORT
Refinancing means replacing your existing loan with a different one
You might do it to get a better rate, to release equity, to consolidate other debts, to change the loan's structure, or to escape a lender that has become difficult to deal with.
The reason it is worth checking is that lenders routinely price more sharply for new customers than for existing ones. A loan that was competitive when you took it out can drift several years later without anything visibly changing.
The reason it is not automatic is that switching has costs, and a longer loan term can increase total interest even at a lower rate. The comparison has to be done properly.
WHY IT HELPS
What a refinance can achieve
Access to equity
Need funds for something specific?
Refinancing can release equity for a renovation, a deposit on another property, or business use — usually at home loan rates rather than unsecured rates.
A structure that fits now
Does the loan still match your life?
Adding an offset, splitting the balance, adjusting the term or moving off interest only can matter more than the rate itself.
HOW IT WORKS
How the comparison should be done
The honest test is not whether the new rate is lower. It is whether you are better off overall once every cost of moving is counted, and once the loan term is held constant.
- Total the switching costs: discharge, registration, application and valuation fees
- Check for break costs if any portion of your loan is fixed
- Consider whether LMI would be payable again at the new lender
- Hold the loan term constant, or a lower rate over longer can still cost more
- Ask your current lender to reprice first — sometimes that settles it
IS IT RIGHT FOR YOU
When refinancing tends to stack up
This tends to suit you if
- Your loan is several years old — and has never been repriced or reviewed.
- Your LVR has fallen — through repayments or growth in the property's value.
- You need a feature you do not have — an offset, a split, or the ability to make extra repayments.
- You are consolidating expensive debt — where secured rates genuinely beat what you pay now.
Worth weighing up
- You are part-way through a fixed term — break costs can wipe out the benefit entirely.
- Your equity is thin — LMI may be payable again on the new loan.
- Consolidation can cost more long term — moving short-term debt onto a 30-year loan stretches the interest.
- Your circumstances have changed — a new lender reassesses you from scratch, at today's income.
Consolidating unsecured debts into a home loan secures them against your property. Lower repayments now can mean more interest overall, and more at stake if things go wrong.
How working with us actually goes
Step 1
We start with a conversation, not an application
Step 2
We work out what you can borrow and what it costs
Step 3
We prepare the application and deal with the lender
Step 4
We stay across the loan long after settlement
COMMON QUESTIONS
Questions we get asked about this
How much does it cost to refinance?
Typically a discharge fee from the outgoing lender, government registration fees, and sometimes an application or valuation fee at the new lender. Break costs apply if you exit a fixed rate early, and these can be substantial.
We total the actual figures for your loan before recommending anything, so you can see the break-even point rather than guess at it.
How long does refinancing take?
Commonly a few weeks from application to settlement, depending on the lender's processing times and how quickly documents are provided.
Discharge of the existing mortgage is often the slowest part, and it is largely controlled by your current lender rather than the new one.
Will refinancing hurt my credit score?
A refinance involves a credit enquiry, which is recorded. One enquiry in the ordinary course is not usually a problem.
Several applications in a short period can be, which is why it is better to assess your position against lender policy first and apply once, deliberately.
Can I refinance if my income has changed?
Possibly, but the new lender assesses you on your current position, not the one you had when the original loan was written. If your income has dropped or your commitments have grown, capacity may be lower than before.
Where a full refinance is not viable, asking your existing lender to reprice is often the more realistic route.
Should I just ask my current lender for a better rate?
Yes — start there. It costs nothing and lenders will often improve pricing for a customer who asks, particularly one who can point to a competing offer.
If they will not move, you then have a clear comparison to act on.
RELATED
Where people usually go next
GET IN TOUCH
Find out where you stand before you commit to anything.
Would rather talk it through?
(02) 9659 1694Important information
The information on this page is general in nature. It has been prepared without taking your objectives, financial situation or needs into account, so it is not personal advice and you should consider whether it is appropriate for you before acting on it.
Any rates, figures or examples shown are indicative only. Lending is subject to approval, and lender eligibility criteria, terms, conditions, fees and charges apply. Talk to us about what your own circumstances allow.