Refinance / Restructuring
What Costs Apply When Refinancing?
5 min read- Finance Guide
- Updated 2026
Quick answer
Refinancing costs can range from modest fees to major fixed rate break costs
0$ 1000+
Before any large break cost is added
- Old loan costs Discharge or break fees
- New loan costs Application and valuation
- Transaction costs Settlement and registration
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Key refinance cost categories
Discharge costs
Fees charged to close the current loan and prepare the mortgage for release
Break costs
Potentially significant costs if a fixed rate loan is ended early
New loan setup
Application, valuation and any product or package related setup fees
Settlement costs
Registration, government, legal or settlement handling charges may still apply
Where refinance costs usually come from
The cost of switching is usually a combination of lender fees, loan type issues and transaction expenses.
Current lender
Discharge and fixed rate costs
The outgoing lender may charge a discharge fee and, for some fixed loans, a break fee
Incoming lender
Application and valuation costs
The new lender may charge for loan setup, valuation, packages or certain features
Transfer process
Settlement and registration
Mortgage transfer, legal handling and registration style costs can still be relevant
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What costs lenders and borrowers usually review
Refinance cost analysis usually looks at the following:
-
01. Discharge fee, break cost and any current lender exit chargesOld loan costs
-
02. Application, valuation, annual package or settlement costsNew loan setup
-
03. Interest savings, feature benefits and the time to recover switching costsNet benefit
Common refinance cost problems
Break cost is higher than expected
A fixed rate break fee can be large enough to reduce or remove the benefit of switching.
Possible solutions include:
Request the exact break figure before applying elsewhere- Compare refinance savings over a realistic holding period
- Time the refinance closer to fixed expiry if practical
Low rate but expensive product
A cheaper headline rate can still work out poorly once package fees, offset costs or feature charges are added.
Possible solutions include:
- Compare the total annual cost, not only the rate
- Check whether all features are actually needed
- Model the payback period for switching costs
Cashback hides the real outcome
A cashback offer may offset upfront cost, but it does not automatically make the loan cheaper over time.
Possible solutions include:
- Assess total cost after the cashback is used
- Review rate reversion and ongoing fees
- Check whether the new loan still fits future plans
Steps to assess refinance costs
Step
01
Request the current payout figure, discharge fee and any break cost
Step
02
Identify the incoming lender's application, valuation and package costs
Step
03
Include settlement, registration or legal handling costs where relevant
Step
04
Compare the new loan's interest cost and features against the old one
Step
05
Allow for cashback only after testing the long term cost of the new loan
Step
06
Proceed only when the total benefit is stronger than the switching cost
Speak with a Property Finance Specialist
Refinance cost analysis can look simple on the surface, but the outcome often changes once fixed rate penalties, valuations, lender fees and feature costs are all included.
A specialist can help compare the real cost of staying versus switching and identify whether the refinance is likely to create a genuine net benefit.
Speak with a finance specialist about your refinance costs.
Submit the short form below and a finance specialist will review the likely costs, compare options and help assess whether refinancing makes sense.
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