When to Refinance Your Home Loan

Whether now is a good time depends on your current rate, your fixed term position and how long you plan to keep the loan. With the RBA raising the cash rate three times in 2026 to 4.35%, lenders have adjusted their variable rates at different speeds. That creates real variation in what borrowers are currently paying. If your rate is more than 0.50% above what competitive lenders are offering on a comparable loan, and you plan to stay in the property long enough to recover the switching costs, it is worth a proper comparison. A specialist can help you run a clear stay-versus-switch review before you apply. See our refinance home loan guide for a broader overview.

The most common sign is a meaningful gap between your current rate and what is available from other lenders. If that gap is 0.50% or more on your loan balance, the potential annual saving can be significant. Other common triggers include a fixed rate period ending, repayments becoming harder to manage, equity growth that opens up better rate tiers, or a change in financial goals such as accessing equity or consolidating debt. When multiple triggers appear at the same time, the case for reviewing your options becomes much stronger.

When a fixed rate ends, your loan typically reverts to the lender's standard variable rate, which is often higher than what competitive lenders are offering elsewhere. Reviewing your options three to six months before that expiry date gives you time to negotiate with your current lender or arrange a refinance without rushing. Break costs generally do not apply once the fixed term has ended, so timing the switch around that expiry can reduce your total cost. For more on fixed rate exit costs, see our fixed rate break costs guide.

The saving depends on your loan balance, the rate difference and the total cost of switching. As a general illustration, a 0.50% rate reduction on a $600,000 loan can save several thousand dollars per year in interest, though exact figures vary by loan term, fees and how long you keep the loan. ASIC's MoneySmart mortgage switching calculator can help estimate your break-even point. For our own tool, see the refinance savings calculator.

Yes, but it is worth checking your lender's break cost estimate first. Break costs compensate the lender for lost interest income and are calculated based on the difference between your original fixed rate and current market rates. With rates having risen through 2026, break costs may be smaller than they were in previous years, but they can still apply. If the break costs are low enough that the ongoing saving outweighs them within a reasonable timeframe, refinancing from inside a fixed term can still make sense. See our fixed rate break costs guide for a detailed breakdown.

The break-even point is the length of time it takes for your monthly savings from a lower rate to cover the upfront cost of switching. For example, if switching costs $3,000 and saves $200 per month, the break-even is 15 months. If you plan to stay in the property beyond that point, refinancing is more likely to be worth it financially. If you plan to sell or move before you reach break-even, the costs may not be recovered. Calculating this figure is one of the most important steps before committing to a refinance.

Submitting a home loan application to a new lender results in a credit enquiry, which is recorded on your credit file. Multiple applications submitted to different lenders at the same time can make your file look like you are experiencing financial difficulty. A well-prepared application to the right lender avoids this issue. It is worth checking your credit file before you apply and confirming your income and expense information is accurate and up to date before any application is submitted.

Refinancing a home loan typically takes between four and eight weeks from application to settlement. This includes the lender's assessment period, any property valuation required, and the discharge of the existing loan with your current lender. Some lenders process refinances faster than others, and having your documents ready before you apply can reduce delays. For a full breakdown of the approval timeline, see our refinance approval process guide.