The short answer: if you haven't reviewed your rate in the last 12 months and you're on a variable or recently expired fixed rate, there's a very good chance you're paying more than you need to. The long answer requires a proper break-even calculation.
$300+
Avg monthly saving
~$2k
Typical switch costs
40+
Lenders compared
3–6 wks
Typical turnaround
The 2026 Rate Environment
After the RBA's rate hiking cycle peaked in late 2023, variable rates for owner-occupiers have been sitting in the 6.0–7.5% range. The spread between the best available rates and typical back-book rates (what banks charge long-term customers) is at historically wide levels.
This matters because banks compete aggressively for new customers while quietly leaving existing borrowers on higher rates. If you've been with your lender for more than 2 years and haven't asked for a rate review, the lender is almost certainly charging you more than they'd offer a new customer walking in the door today.
The Break-Even Calculation
The most important number in any refinance decision is your break-even point: how many months before the monthly savings exceed your switch costs.
Simple Break-Even Formula
Example:
$600,000 loan · Current rate 6.85% · New rate 6.20%
Monthly saving: ~$240 · Switch costs: $2,100
Break-even: 8.75 months → Worth it if you plan to stay 12+ months
Use our refinance break-even calculator to run these numbers with your actual loan balance, rates, and estimated switch costs.
5 Signs You Should Refinance Now
- You're on a rate starting with 7. Sub-7% rates are widely available in 2026 for most borrower profiles. If your rate has a 7 in front of it, a comparison is overdue
- Your fixed rate is expiring in the next 3–6 months. Most borrowers who fixed in 2020–2022 are rolling off onto high variable rates. Getting ahead of this expiry is far better than scrambling after rollover
- Your loan features don't match your needs. If you're paying for an offset account you don't use, or you need one and don't have it, refinancing to a better-matched product makes sense regardless of rate
- Your equity has grown significantly. If you bought at 80% LVR and your property value has increased, you may now be at 65–70% LVR — unlocking better rates without LMI concerns
- You haven't had a loyalty review in 2+ years. Before refinancing, always ask your current lender to match a competitor. If they won't — switch
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3 Signs You Should Wait
Refinancing isn't always the right move. Here's when it makes sense to stay put:
Wait — if any of these apply
- • You're inside a fixed rate break fee period. Break costs can be thousands of dollars and may wipe out years of savings
- • Your financial position has changed. Reduced income, higher debt, or a recent credit issue could mean a new application gets declined — damaging your position
- • You're within 2–3 years of paying off the loan. Switch costs and the reset dynamics may not make financial sense for a short remaining term
How the Refinance Process Works
- Broker assessment. We review your current loan, rate, LVR, and financial position. We identify suitable lenders and get indicative rates before lodging any application
- Valuation. The new lender orders a property valuation (typically takes 3–10 business days). Many lenders use automated valuations at no cost; others require a physical inspection
- Formal approval. Lender assesses serviceability and issues a letter of offer. We review the terms and flag any conditions
- Settlement. Your old loan is discharged and the new loan settles simultaneously. This is handled by solicitors or an online settlement platform — no physical attendance required in most cases
- Done. Your new lower rate takes effect from the day of settlement
The full refinance guide on our website covers cashback offers (which come and go), comparison rate traps, and what to watch out for in the fine print of refinance offers.
What About Cashback Offers?
Several lenders periodically offer cashback incentives of $2,000–$4,000 for refinancers. These look attractive but require careful analysis:
- Cashback lenders often have slightly higher ongoing rates — the cashback can be recovered by the lender in 12–24 months through the rate difference
- Cashback conditions (minimum loan size, lock-in periods) often restrict your flexibility to refinance again if rates change
- The best rate lender and the highest cashback lender are rarely the same — run both scenarios through a break-even calculation
Our broker comparison includes all cashback offers across our lender panel — we'll show you total cost of ownership over 3 and 5 years so you can compare properly.
Frequently Asked Questions
Typical switch costs: discharge fee $350–$500, new lender application fee $0–$600 (often waived), government registration fees ~$300, legal fees $500–$1,500 (often covered by some lenders). Total range: $1,000–$3,000. Run the break-even: divide this by your monthly saving to see how many months before you're ahead.
The best time is when: your rate is 0.5%+ above what's available to you; you're outside a break fee period; you have 20%+ equity; and your income and credit are stable. In 2026, many borrowers rolling off expired fixed rates are in a strong position to refinance to competitive variable rates.
Not automatically — you choose the new term. Most borrowers keep their remaining term (e.g. 22 years if 8 years in). Some extend to 30 years to reduce repayments, but this increases total interest. Your broker shows you both scenarios so you can decide what's right for your cash flow.
Yes — LMI may apply at some lenders above 80%, but professional borrowers (doctors, lawyers, accountants, etc.) often qualify for waived LMI products. If you already paid LMI and your LVR hasn't changed much, some lenders offer partial LMI portability credit. A broker will find the best path for your LVR position.
3–6 weeks from application to settlement in most cases. Valuation (1–2 weeks), lender assessment (1–2 weeks), settlement preparation and discharge (1 week). The broker manages most of this — your involvement is primarily document provision and signing the new loan contract.
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