What interest rate applies when refinancing?

The refinance rate you are offered depends on factors such as loan to value ratio, loan purpose, repayment type, fixed or variable structure, credit profile, property type and lender policy at the time of application.

Is the lowest advertised refinance rate always the cheapest option?

Not always. The real cost of refinancing can also include annual fees, discharge costs, valuation costs, offset or package fees and, if leaving a fixed loan early, possible break costs. The comparison rate and total cost both matter.

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Refinance / Restructuring

What Interest Rates Apply When Refinancing?

Quick answer

Refinance rates often vary by

0.50% 2%

or more between cheaper and dearer loan options

Core drivers LVR, loan type, policy
Common rate types Variable, fixed or split
True cost test Rate plus fees

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Refinance interest rates are shaped by loan to value ratio, property type, repayment type, loan purpose, borrower strength and lender pricing policy. Two borrowers refinancing similar balances can still receive different pricing depending on risk, structure and negotiation.

The rate alone is not the whole answer. Fees, offset features, package charges, comparison rates and any break costs on the outgoing loan all affect whether a refinance actually improves the position.

When refinancing, the new lender prices the loan based on current market conditions and the details of the new application. Variable, fixed and split rates can all apply, and the cheapest advertised rate is not always the most suitable or most available.

Borrowers refinance to reduce repayments, improve flexibility, reset the term, release equity or move away from a loan that has become uncompetitive. The best outcome usually depends on both pricing and structure, not one or the other alone.

Key concepts in refinance pricing

Base rate and margin

The final rate usually reflects a lender base price plus any risk or policy margin

Comparison rate

This helps show how fees affect the overall cost, not just the headline interest rate

Risk based pricing

Sharper pricing is often offered where the LVR is lower and the file is stronger

Loan structure

Variable, fixed, split, offset and interest only settings can all change the rate outcome

Rate and structure options

When refinancing, borrowers can choose a pricing and feature mix that suits their current priorities, whether that is lower repayments, certainty, flexibility or access to features such as an offset account.

Variable rate

Flexible but changeable

Variable rates can move with lender pricing and may offer more flexibility for extra repayments and offset features

Fixed rate

Certainty for a set term

Fixed rates can provide repayment certainty for a period, but early exit may trigger break costs

Split loan

Part fixed, part variable

A split structure can balance flexibility with certainty, though the final blended rate depends on both portions

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What lenders price for

Lenders usually price refinance applications by looking at the following factors:

01. Loan to value ratio and current valuation

Core pricing driver
02. Borrower profile, repayment history and serviceability

Credit risk
03. Property type, loan purpose, product features and lender policy

Product fit

Common problems with refinance rate comparisons

The cheapest rate is not actually the cheapest loan

A low headline rate can still work out more expensive once annual fees, package charges, offset costs and switching costs are included.

Possible solutions include:

Compare the comparison rate as well as the headline rate
Model the total cost after fees and incentives
Check whether the included features are genuinely needed

Break costs wipe out the savings

Leaving a fixed rate or packaged facility early can trigger costs that outweigh the benefit of moving to a lower refinance rate.

Possible solutions include:

Check exit and break costs before lodging the refinance
Compare the payback period against the expected saving
Consider waiting until the fixed period is closer to expiry

A strong borrower still gets a higher rate than expected

Some loans price higher because of LVR, property type, debt release purpose, interest only structure or lender appetite, even where repayment history is good.

Possible solutions include:

Compare lenders with different pricing models
Review whether a lower LVR or lower cash out improves pricing
Check whether switching from interest only to principal and interest sharpens the rate

Steps to assess refinance interest rates

Step

01

Review the current loan rate, product type, fees and any fixed rate expiry or break costs

Step

02

Estimate the likely current value and resulting refinance LVR

Step

03

Prepare updated income, liability and property documents for pricing and approval checks

Step

04

Compare variable, fixed and split refinance options across suitable lenders

Step

05

Check the true cost including valuation, discharge, package and ongoing fees

Step

06

Proceed only if the savings or structural benefit outweigh the switching costs

Speak with a Refinance Specialist

Refinance pricing can vary significantly depending on the lender, the property, the loan to value ratio, the chosen structure and the borrower's overall profile.

A specialist can compare the real rate options, the likely policy fit and the true switching cost before a refinance decision is made.

Speak with a finance specialist about your refinance rate options.

Submit the short form below and a refinance specialist will review your current loan, your likely pricing range and the options that may suit your situation.

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Call us to discuss your refinance rate questions

Refinance / Restructuring

What Interest Rates Apply When Refinancing?

Quick answer

Refinance rates often vary by

0.50% 2%

Key concepts in refinance pricing

Base rate and margin

Comparison rate

Risk based pricing

Loan structure

Rate and structure options

Variable rate

Flexible but changeable

Fixed rate

Certainty for a set term

Split loan

Part fixed, part variable

Need Help with your Project?

What lenders price for

Common problems with refinance rate comparisons

The cheapest rate is not actually the cheapest loan

Break costs wipe out the savings

A strong borrower still gets a higher rate than expected

Steps to assess refinance interest rates

Step

01

Review the current loan rate, product type, fees and any fixed rate expiry or break costs

Step

02

Estimate the likely current value and resulting refinance LVR

Step

03

Prepare updated income, liability and property documents for pricing and approval checks

Step

04

Compare variable, fixed and split refinance options across suitable lenders

Step

05

Check the true cost including valuation, discharge, package and ongoing fees

Step

06

Proceed only if the savings or structural benefit outweigh the switching costs

Speak with a Refinance Specialist

Speak with a finance specialist about your refinance rate options.

Contact Form

Prefer to speak with someone directly ?

1300 421 044

Additional Questions

01What is the difference between a refinance rate and a comparison rate?

02Are variable refinance rates always cheaper than fixed rates?

03Do lower LVR loans usually get better refinance rates?

04What fees should be checked when comparing refinance rates?

05When does switching to a lower refinance rate actually make sense?

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