When you take out a home loan, whether it is on a 30 or 25-year term, it is very unlikely that is the loan you will keep for the entirety of that term. There are a number of reasons why you might choose to refinance your home loan. By comparing your options you may be able to find a more competitive interest rate, particularly if you haven’t checked in more than a year, find a loan with more features you want, access equity or even consolidate your debts into one.
What does refinancing your home loan mean?
Refinancing is where you move from one loan to another, usually with a different rate, features or term. It may be with your current lender or another. If you negotiate a lower interest rate with the same loan, this is called repricing.
Top reasons to consider refinancing in 2026
Finding a more competitive interest rate:
One of the most common reasons homeowners look to refinance their mortgage is to get onto a more competitive interest rate. With a lower interest rate you could lower your monthly repayment without altering the amount of interest you pay over the term of your loan, or maintain your repayments but pay your loan off sooner.
Through 2025 we saw a number of cash rate cuts, which resulted in lower interest rates. This has created more competition in the market and reason to compare your loan with others on offer. Some lenders offer a more competitive interest rate to new customers than existing, making it important to check your rate and understand whether it is still offering value.
The interest rate isn’t the only consideration when refinancing. Some lenders offer home loan refinancing deals to entice borrowers. These often come in the form of a cash payment or waived fees. A cashback deal should not be the main determinant of whether you switch to a lender, but can be factored into the calculation of how much you could save you over the life of the loan.
Accessing equity:
Equity is the amount of money between what you owe on the loan and the value of the property. This represents the value that you own.
If you have a need for additional funds, such as to conduct renovations on your home, you may be able to use equity built up in your property. This could be done through refinancing your loan amount by leveraging the equity as security, or potentially accessing a line of credit loan, which allows the borrower to take out funds up to a certain limit at any time.
Making use of features:
Not all home loans are equal – some come with features attached that may be useful for some borrowers. For example, some loans may be more flexible for repayment options, such as making additional payments without any fees. Some may offer an offset account or redraw facility that can enable you to put more money toward paying off the loan, which will save you in interest, but access it if you need it. Note that these features can come at an additional price tag, so it is a good idea to calculate the potential savings while considering the fees.
Consolidating debt:
If you have multiple debts, such as credit cards, car loans or personal loans, it may be a good idea to consolidate them into one. This could merge repayments so you only have one and potentially get your other debts into a loan with a lower interest rate.
When is the ‘right’ time to refinance your home loan?
There is no hard and fast rule around when the right time is to refinance your home loan.
Some common triggers for people to consider refinancing are major changes in your life, such as marriage, death in the family, birth of children or a change in career.
A key consideration is fees. For example, if you currently have a fixed-rate loan, you will likely incur break fees if you wanted to refinance. There are also fees such as application and discharge fees, property valuation fees and more. Because of this, it isn’t particularly common for people to refinance in their first 12 months – though it is possible. It is a good idea to weigh these up with your possible savings to determine if it is a good idea for you to refinance.
It is a good idea to regularly conduct a health check on your home loan to ensure you have a competitive interest rate and are getting the most out of your features. Interest rates can fluctuate, so if you have a variable rate, it is a good idea to check your loan at least every 12 months to make sure your rate is still competitive.
Speak with your local Loan Market mortgage broker about whether it is a good time for you to refinance and to set your strategy to achieve your financial goals.
Common misconceptions about refinancing
It’s too much hassle
When you work with a broker, they do all the legwork to refinance your loan. They will let you know exactly what is needed and help with the paperwork.
I refinanced last year so I can’t do it again
There is no rule around how often you can refinance. If it is in your best interest to refinance again, you absolutely can do so. Just keep in mind there are usually fees involved in refinancing and it is a good idea to weigh up all costs before making a decision.
I need to find the lowest interest rate and best loan
The interest rate isn’t the only consideration when choosing a home loan. For example, some features, such as an offset account or redraw facility, could help you to save money if they suit your circumstances. The right loan for you is based on much more than just the interest rate.
FAQs about refinancing your home loan
How often can you refinance your home loan?
There is no rule about how often you can refinance your home loan. Keep in mind if you have a fixed-rate loan, there will likely be break fees involved. There are other fees to also consider including application and discharge fees, which impact the total savings you would make by refinancing your loan, if that is part of the reason you are considering the change. It is a good idea to weigh up the costs to determine if it is a good idea for you.
What documents do I need to refinance?
Some documents you may need to refinance include:
- Personal ID (such as a driver licence or passport)
- Employment details and income (recent payslips)
- Credit details (such as credit card and personal loans)
- Current home loan (showing loan balance and details)
- Property ownership (value estimate and ownership details)
- Savings and assets (bank account balances, asset values, superannuation)
Will refinancing affect my credit score
When you apply to refinance your loan, it will trigger a “hard enquiry” for a credit product on your credit report. Occasional hard enquiries do not gravely impact your credit score, however multiple within a short period of time can negatively impact it. This is why it is a good idea to do your research before applying to increase the likelihood of the application being accepted. Working with a broker can help you with this.
Can I refinance if I have a small deposit or limited equity
If you have low savings or limited equity, you may still be able to refinance. However, if you have less than 20% equity in your property (which means your loan is more than 80% of the total value of the property), you may need to pay lenders mortgage insurance (LMI) if you refinance. This can cost tens of thousands of dollars.
Are cashback offers worth it?
While they can provide a bit of a sugar hit to the pocket, refinancing to another loan for the cashback may not be a wise choice. Other factors such as fees, interest rates and terms or features can play a larger role in the overall cost saving you could get from refinancing. It is a good idea to look beyond the initial cash to see the longer-term costs and benefits – you may just find another loan that doesn’t offer a cashback actually provides greater savings.
