RefinanceMakeMyLoan brokers compare dozens of lenders and owe you a Best Interests Duty — your bank doesn't.
There is no calendar rule for refinancing. Some borrowers benefit from reviewing their loan after a year; others are genuinely better off leaving a good loan alone for a decade. What matters is recognising the specific signals that suggest your current loan no longer fits — and, just as importantly, the situations where refinancing would cost you more than it saves. This guide covers both sides honestly.
Lenders compete hard for new customers and far less hard to keep existing ones. Over time, the gap between what you pay and what the same lender offers new borrowers tends to widen — a pattern often called the loyalty tax. You will not get a letter about it; the drift happens through out-of-cycle rate changes and new-customer discounts you never see.
The test is simple: find your current rate on your statement, then check what your own lender advertises to new customers for the same loan type and LVR. If there is a meaningful gap, you have a live signal. Your first move can be a repricing request with your current lender — we cover how in our guide to the loyalty tax on home loans — and if they will not close the gap, the market probably will.
When a fixed term ends, most loans roll automatically onto the lender's revert rate, which is often higher than what new customers are offered. This makes fixed-rate expiry the single most predictable refinancing trigger there is — you know the date months in advance.
Start reviewing your options two to three months before expiry so a refinance can settle around the rollover date without break costs. Our fixed rate cliff guide walks through the timing in detail.
Your loan-to-valuation ratio (LVR) determines which pricing tiers you qualify for. Lenders typically price loans in LVR bands, and crossing below thresholds — especially 80 per cent, and often again at lower bands — can unlock sharper rates that simply were not available when you first borrowed.
You cross these milestones two ways: by paying down the loan, and by your property rising in value. If you bought with a small deposit a few years ago and your suburb has moved, you may have crossed below 80 per cent without noticing. That transforms the refinancing maths: no LMI, more lenders competing for you, better pricing. Check where you stand with our LVR and LMI calculator.
Loans are structured around the circumstances you had at application. When circumstances change, the structure can stop fitting:
A loan review after any major life event costs nothing and often surfaces options you did not know existed.
Free, instant, and no details required — see roughly what lenders could approve for you.
A packaged loan with an annual fee, premium credit card and offset account is poor value if you keep no savings in the offset and never use the card. Equally, a bare-bones loan is poor value if you have significant savings sitting in a transaction account earning nothing when an offset could be reducing your interest daily. Fit matters as much as rate.
Refinancing has real costs — discharge fees, government registration fees, potentially break costs — and situations where it works against you:
Add up the one-off costs of switching, then work out the monthly saving on the new loan over your remaining term. If the costs are recovered within roughly the first year or two, and none of the red flags above apply, refinancing usually earns its keep. If the payback period is long, or a red flag applies, staying put — perhaps after a repricing request with your current lender — is a perfectly good decision. You can see what a refinance involves end to end on our refinance page.
A broker can check your rate against the current market, estimate your LVR position, and tell you plainly if refinancing is not worth it in your situation. If you would like that sanity check, get in touch — it costs nothing and usually takes one conversation.
A light-touch review once a year is a good habit: check your rate against what your lender offers new customers, and note your rough LVR. A deeper review makes sense at trigger events — a fixed term expiring, a major life change, or crossing below 80 per cent equity.
There is no legal minimum, but practical ones exist. Some lenders prefer to see six to twelve months of clean repayment history on the existing loan, and if you received a cashback, clawback conditions on your broker or fees may apply. Refinancing very early also rarely makes financial sense once switching costs are counted.
Usually only with a strong reason. Above 80 per cent LVR the new lender will typically charge LMI, and premiums do not carry over from your original loan. For many borrowers it is better to keep paying down the loan and refinance once under the 80 per cent threshold, where pricing improves and LMI disappears.
Yes. A refinance is assessed as a brand-new application under responsible-lending rules, with your income tested at a buffer of around 3 percentage points above the actual rate. Changes in income, new debts, higher living expenses or a tighter assessment can mean a borrower who services their current loan perfectly still does not pass a new lender's test.
It depends on your balance and remaining term. On a large balance with many years remaining, even a modest rate reduction can outweigh switching costs fairly quickly; on a small balance or short remaining term it may never do so. Model the saving over your actual remaining term rather than relying on a rule of thumb.
This article is general information only and doesn't consider your personal objectives, financial situation or needs — it isn't personal credit advice, and lending criteria, rates, fees and government schemes change. Before acting, speak with a licensed MakeMyLoan broker or credit representative who will assess your circumstances and provide a credit guide before any credit assistance is given.
