Refinance
How refinancing works
Understand the refinance process before comparing rates, documents, valuation, lender policy, and switch costs.
Key checks before you decide
Reviewed by emoney broker team. Updated 29 July 2026. Sources are listed below.
- Review the current loan, goal, costs, documents, and valuation risk before choosing a lender path.
- Compare staying, repricing, restructuring, and switching before treating refinance as the only option.
- Check whether discharge fees, break costs, LMI, cashback conditions, or loan-term changes affect the result.
- Prepare income, debts, current-loan, property, and insurance details before lodging an application.
In this guide6 sections
The first step is a current-loan review
Review the loan you already have before comparing a refinance. Check the balance, rate, repayment, rate type, features, fees, fixed-rate status, remaining term and the problem you want solved.
The current loan is the baseline for every refinance decision. Without it, a new lender comparison can look useful while missing the cost of leaving, the value of existing features, or the reason the borrower wants a change.
Start by writing the refinance goal in plain language. The goal may be repayment pressure, rate review, loan structureHome Loans / Loan decisionsCompare loan typesCompare fixed, variable, split, repayment type, offset, redraw, LVR and deposit trade-offs before choosing a structure.Open page , equity access, debt restructuringRefinance / Review goalsRestructure debtCompare repayment relief with long-term interest cost, behaviour risk, and lender policy before restructuring debt.Open page , fixed-rate expiryRefinance / Review goalsFixed rate endingReview revert rates, timing, break-cost issues, split loans, and refinance options before the fixed period ends.Open page , or service frustration. Different goals need different checks before an application makes sense.
Also check the timing pressure. A refinance linked to fixed-rate expiryRefinance / Review goalsFixed rate endingReview revert rates, timing, break-cost issues, split loans, and refinance options before the fixed period ends.Open page , settlement, separation, debt restructuringRefinance / Review goalsRestructure debtCompare repayment relief with long-term interest cost, behaviour risk, and lender policy before restructuring debt.Open page , or renovation funding may need earlier document preparation than a general rate review.
| Stage | What happens | What to check |
|---|---|---|
| Current-loan review | The existing balance, repayment, rate type, fees, features, and goal are checked. | Whether repricing or restructuring could solve the issue. |
| Cost and option comparison | Staying, repricing, restructuring, and switching are compared before lodging. | Discharge fees, break costs, package fees, cashback conditions, and term reset. |
| Document preparation | Income, debts, expenses, current loan, property, and purpose details are prepared. | Whether the file is simple or needs extra explanation. |
| Application and valuation | The lender reviews borrower position, loan purpose, property value, and security. | Serviceability, LVR, valuation, LMI risk, and policy fit. |
| Settlement and handover | The new loan can pay out the old loan once conditions and documents are complete. | Discharge authority, signed documents, insurance, accounts, and first repayment. |
- Current lender, balance, rate, comparison rate, and repayment.
- Fixed, variable, split, interest-only, or introductory-rate status.
- Offset, redraw, extra repayment, package, and annual fee details.
- Reason for the review, such as repayments, equity, structure, or debt restructuring.
Broker note
Compare staying before switching
Moving lenders is only one refinance path. The current lender may offer a better rate or structure, so compare staying, repricing, restructuring and switching after costs and policy are checked.
MoneySmart recommends checking what the current lender can offer before switching. That matters because the fastest-looking refinance is not always the cleanest answer once discharge steps, new lender fees, valuation timing, and paperwork are included.
A current-lender reprice may solve a rate issue without changing lender. A restructure may solve a feature issue without a full switch. A full refinance becomes more relevant when the goal cannot be solved cleanly inside the current lender or when the comparison still works after costs.
- Ask whether the current lender can reprice the loan.
- Compare the retention offer with the cost of switching.
- Check whether a structure change solves the issue without a new lender.
- Only move to application once the purpose is clear.
Watch out
The new lender still assesses the file
A refinance is not automatic. Income, expenses, credit conductGuides / ApprovalCredit score and home loansUnderstand how credit conduct, debts and report issues can affect a home-loan conversation.Open page , property value, loan purpose, LVRHome Loans / Loan decisionsLVR and LMI explainedUse this when a guide mentions loan-to-value ratio, lenders mortgage insurance, or low-deposit trade-offs.Open page , and documents still need to fit lender policy before a loan can proceed.
An approval from years ago does not transfer to a new lender. The new lender usually assesses current income, liabilities, expenses, repayment history, loan purpose and property security under its own policy.
This is why the refinance can slow down when the borrower has changed jobs, started a business, increased credit limits, added dependants, used equity, bought an investment property, or wants debt restructuringRefinance / Review goalsRestructure debtCompare repayment relief with long-term interest cost, behaviour risk, and lender policy before restructuring debt.Open page . None of those details automatically stop a review, but they need context before lender selection.
The property assessment can also change the answer. A lower-than-expected valuation may affect LVRHome Loans / Loan decisionsLVR and LMI explainedUse this when a guide mentions loan-to-value ratio, lenders mortgage insurance, or low-deposit trade-offs.Open page , available equity, possible LMI, or the amount that can be refinanced.
- Income may need recent evidence.
- Credit limits and debts still affect serviceability.
- The property may need valuation and security checks.
- Cash-out, debt restructuring, or investment purposes can need extra explanation.
Prepare documents before lodging
The initial broker review can often begin with a short set of current documents. Once the likely lender path is clear, the exact application checklist can be confirmed.
The initial document set should show whether a refinance path is worth preparing. It does not need to include every possible lender document on day one, but it should be accurate enough to reveal serviceability, equity, debt and purpose issues.
A refinance review will usually need identity and income evidence, current loan statements, repayment and rate details, property information, debts, credit limits, living expenses, and context for cash-out, debt restructuringRefinance / Review goalsRestructure debtCompare repayment relief with long-term interest cost, behaviour risk, and lender policy before restructuring debt.Open page , separation or business income.
- ID and contact details.
- Recent income evidence for each borrower.
- Current home-loan statements, repayment, rate type, and fixed expiry if relevant.
- Debts, credit-card limits, living expenses, property details, and insurance information.
Next step
Want a broker to check this against your situation?
Share the loan goal, timing and a few key details. An emoney broker can then pick up the enquiry with the relevant context.Start refinance quick checkExample
Use calculators to compare the path
Estimate the payback period for switching costsRefinance / Before changingRefinance costsCheck discharge fees, new-loan costs, settlement adjustments, break costs, and the time needed to recover switching costs.Open page and model the proposed repayment. The result still needs policy, valuation and document checking.
A useful refinance estimate includes more than the monthly repayment difference. Add the costs to switch, then check how many months it may take for the estimated saving to recover those costs. If the borrower may sell or refinance again before that point, the result needs closer questioning.
Be careful when a lower repayment comes from extending the loan term. The monthly number may look easier, but the total interest over time can increase. That trade-off should be visible before the borrower treats the refinance as a clear improvement.
- Compare current repayment with a realistic alternative.
- Include discharge, settlement, application, valuation, and package costs.
- Check whether a longer term is creating the lower repayment.
- Ask a broker to review assumptions before relying on the estimate.
Settlement pays out the old loan
If the refinance is approved, accepted, documented, and settled, the new loan usually pays out the old one. Timing can depend on discharge instructions, settlement coordination, lender documents, and any final verification.
Settlement is the handover point between lenders. The borrower may need to sign loan documentsGuides / ApprovalDocuments needed for a home loanPrepare identity, income, savings, debts, expenses and property records before a broker or lender review.Open page , complete the old lender's discharge process, confirm insurance details, and keep enough money available for any fees or adjustments that are not added to the loan.
After settlement, check the old loan is closed, direct debits have stopped, offsetHome Loans / Loan decisionsOffset vs redrawCompare how offset accounts and redraw may affect interest, access to cash, and loan structure decisions.Open page or transaction accounts are still working as expected, and the first repayment date on the new loan is clear. A refinance is not finished just because the application was approved. Keep the settlement statement and final payout figure with the new loan records, and update any salary credits or automatic transfers.
This post-settlement check is also a good time to set the next review date, especially if the refinance involved a fixed period, debt restructuringRefinance / Review goalsRestructure debtCompare repayment relief with long-term interest cost, behaviour risk, and lender policy before restructuring debt.Open page , equity release, or a longer loan term.
- The existing lender usually needs discharge authority.
- The new lender may need signed loan documents and insurance details.
- Direct debits, offset accounts, and salary payments may need updating.
- Keep watching both lenders until settlement and repayments are confirmed.
Calculator next step
Refinance savings calculator
Compare the current loan with a new-rate scenario and see whether switching costs may be recovered.
- Best for
- Deciding whether a refinance is worth a broker review before starting lender work.
- What it calculates
- Current repayment, new repayment, estimated switching costs, monthly difference, and rough break-even.
A broker still needs to check discharge costs, valuation, features, cashback rules, income, documents, and lender policy.
Open Refinance savingsSources used
- ASIC MoneySmart choosing a home loan
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC MoneySmart switching home loans
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC MoneySmart using a mortgage broker
ASIC MoneySmartofficial sourceChecked 29 July 2026
- Reserve Bank of Australia cash rate target
Reserve Bank of Australiaofficial sourceChecked 29 July 2026
This guide is general information and does not take into account your objectives, financial situation, or needs. A broker can review your circumstances before any recommendation.
Next step
Want a broker to check what applies to you?
Share the goal, timing and current loan context in Quick Check so the broker knows what needs reviewing.
Related guides
Keep moving through the decision.
Refinancing guide: how to review your home loan
A direct refinancing guide for reviewing your current loan, checking costs, comparing options, and deciding whether to speak with a broker.
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When should I refinance my home loan?
Common refinance triggers to check, including rate changes, fixed-rate expiry, equity use, repayment pressure, and life changes.
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Refinancing costs explained
A guide to common refinance costs such as discharge fees, application fees, valuation fees, government charges, break costs, and package fees.
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