Refinance / Restructuring
When Should You Refinance A Property Loan?
5 min read- Finance Guide
- Updated 2026
Quick answer
Refinancing often makes sense when
3 5 years
or more have passed since the last rate review
- Potential saving Lower rate or fees
- Common trigger Fixed term ending
- Other trigger Equity or cash out need
1300 421 044
1300 421 044
Common signs it may be time to refinance
Your rate is no longer competitive
If your current loan has not been reviewed for a long time, or similar loans are priced materially lower, refinancing may reduce ongoing interest costs.
A fixed rate period is ending
When a fixed period expires, a borrower may roll onto a higher revert rate. This is often a natural time to compare lenders and renegotiate.
You need equity or cash out
Refinancing can be useful when the property has increased in value and the borrower wants to fund renovations, another purchase or approved personal objectives.
The loan structure no longer fits
Borrowers sometimes refinance to move from interest only to principal and interest, add an offset account, consolidate debts or reset the loan term.
What borrowers usually compare
The best time to refinance usually appears when the gap between the old loan and the available alternatives is clear enough to justify the cost and effort of switching.
Interest rate and comparison rate
Rate savings over time
A lower rate can matter, but the saving should be tested against all switching costs and the likely hold period on the new loan.
Fees and break costs
Total switching cost
Discharge fees, application fees, settlement costs and fixed rate break fees can materially change whether refinancing is worthwhile.
Features and flexibility
Offset, redraw and structure
A refinance may be worthwhile if the new loan provides features or structures that better support the borrower's cash flow and future plans.
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What lenders consider before approving a refinance
Lenders still assess a refinance as a new loan application. Even if the existing loan has been paid on time, the new lender will usually review:
-
01. Current income and employment positionServiceability
-
02. Repayment conduct and credit historyCredit profile
-
03. Current property value and security qualityValuation
Common refinance problems
The savings are too small
Sometimes the new rate looks better, but once fees and time are considered, the net benefit is too small.
Possible solutions include:
Run the numbers over your expected hold period- Ask the current lender to match the deal first
- Use a switching calculator to test break even timing
Fixed rate break costs are high
A refinance during a fixed rate term can trigger a large break fee, especially if market rates have fallen since the loan was set.
Possible solutions include:
- Wait until the fixed period is closer to expiry if appropriate
- Request a break cost estimate before applying
- Compare total cost, not just the rate
You need equity or cash out shortfall
A borrower can be fully up to date on the current loan and still fail a new lender's servicing assessment because refinance is reassessed under current policy.
Possible solutions include:
- Reduce other debts if possible
- Review whether a simpler restructure would work
- Consider whether staying with the current lender is stronger
Steps to review a refinance properly
Step
01
Check your current rate, fees and remaining loan structure
Step
02
Compare alternatives and estimate likely savings
Step
03
Check break costs, discharge fees and application costs
Step
04
Review your equity, borrowing needs and preferred features
Step
05
Submit the refinance application and complete valuation
Step
06
Complete approval, discharge and switch once the benefit stacks up
Speak with a Property Finance Specialist
The right time to refinance can depend on the current rate, remaining fixed term, equity position, property value, fees and the borrower's wider plans.
A specialist can compare options and help determine whether the benefit of refinancing is strong enough to justify making the change.
Speak with a finance specialist about the right time to refinance.
Submit the short form below and a finance specialist can review your current loan, potential savings, equity position and whether refinancing is likely to be worthwhile.
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