Refinancing Your Home Loan: The Complete 2026 Process
ADS Team
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August 2, 2026
about 1 month ago
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In short: Refinancing means replacing your existing home loan with a new one, usually with a different lender, to get a lower rate or release equity. The process takes two to six weeks, costs roughly $600 to $1,500 in discharge and registration fees, and requires passing the new lender's serviceability assessment at about 3 percentage points above the actual rate.
Key takeaways
- Ask your current lender to reprice first - it is free and frequently works.
- Total switching costs are usually $600-$1,500, excluding any fixed-rate break cost.
- You must pass the new lender's buffered assessment, which is why some borrowers cannot move.
- Resetting to a fresh 30-year term lowers the repayment but can add six figures of interest.
The process, step by step
- Ask for a repricing. Call retention, quote a competitor rate, and see what they do. Costs nothing, takes a day.
- Compare properly - rate, fees, offset, and whether the new term matches your remaining term.
- Apply, with payslips or financials, statements and ID.
- Valuation - usually automated or desktop, sometimes a full inspection.
- Formal approval, then loan documents to sign.
- Discharge - lodge the form with your outgoing lender early; this is normally the slowest step.
- Settlement - the lenders exchange, and your new repayments begin.
What it costs
| Cost | Typical |
|---|---|
| Discharge fee (outgoing) | $150-$400 |
| Mortgage registration and transfer | $150-$400 |
| Application / settlement fee (incoming) | $0-$600 |
| Valuation | Often waived |
| Break cost (fixed loans only) | Potentially significant |
| LMI (if above 80% LVR again) | Not transferable between lenders |
That last line catches people. LMI paid to your current lender does not follow you - refinancing above 80% LVR means paying it again.
The term reset trap
Refinancing to a fresh 30-year term after seven years of repayments lowers the monthly figure, which looks like a win. It is not.
On a $600,000 balance with 23 years remaining at 6.5%, moving to a new 30-year term at the same rate cuts the repayment by roughly $370 a month - and adds well over $100,000 in total interest, because you return to the front of the amortisation curve where almost everything you pay is interest.
Ask the new lender to match your remaining term unless the lower repayment is specifically what you need.
Frequently asked questions
How long does refinancing take?
Two to six weeks. The discharge from your existing lender is usually the bottleneck, so lodge that form as early as the new lender allows.
Will refinancing hurt my credit score?
A single application creates one enquiry, which is minor. Applying to several lenders in a short period is what causes damage, because the cluster reads as distress.
Can I refinance if my property value has fallen?
Only if the new loan still fits within the lender's LVR limits on the current valuation. If you would be above 80%, you may face LMI again or be unable to move at all.
Related reading
- Break Costs on Fixed Loans: How They Are Calculated
- Self-Employed Home Loans: How Lenders Assess Income
- Low Doc Home Loan Guide for the Self-Employed
Sources
- Switching home loans — ASIC Moneysmart
- Home Loan Price Inquiry final report — ACCC
Rates checked as at 2 September 2026. Interest rates, lender policies and government schemes change frequently. Figures in this article are illustrative and were accurate at the date shown.
General advice warning: This article contains general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice. Consider whether it is appropriate for you and seek advice from a licensed credit representative before acting.
Any interest rate shown is an example only and is not an offer of credit. Where a rate is quoted, the applicable comparison rate is available from the relevant lender and should be considered alongside it.
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