Refinance
What to do when you cannot refinance
7 min read · By Daniel Lagden · 23 August 2026
If you cannot refinance, you are not stuck with nothing. Being unable to switch usually comes down to equity, serviceability at the assessment rate, or a change in income, and each of those has a different set of options. A perfect repayment history does not guarantee approval elsewhere, because a new lender must assess the loan as though it were brand new.
Quick summary: work from the inside out. Start with what your existing lender can do without a new application, because that requires no reassessment. Then look at structure. Then look at whether a specialist lender fits. Selling is a real option too, and sometimes the right one, but it belongs at the end of the list rather than the beginning.
Why can a good borrower be refused?
Because affordability is tested against a buffered assessment rate rather than the rate you actually pay, and because the property must value up to give you enough equity. Rising rates lift the assessment hurdle for everyone, and a flat or falling valuation reduces equity. Combine the two and a borrower who has never missed a payment can fail a test they would have passed comfortably a few years earlier. It is a policy outcome, not a judgement on you.
Start with your existing lender
A rate review with your current lender does not require a new serviceability assessment, because you are not taking on new debt. Retention pricing is real and it is usually only applied on request. Beyond price, an existing lender can often consider repayment relief, a temporary switch to interest only, or a term extension, each of which lowers the monthly commitment without a full reassessment. These have long term costs and should be understood properly, but they exist.
Then look at structure and outgoings
- Reduce or close undrawn credit card and overdraft limits, since the limit counts against you whether you use it or not.
- Clear small consumer debts, which consume both serviceability and your debt to income ratio.
- Review whether an offset or a split would suit how your household actually handles money.
- Check whether consolidating genuinely helps or simply spreads short term debt across thirty years.
- Confirm your property valuation is current, because an outdated figure can understate your equity.
Consider whether a specialist lender fits
Where a mainstream lender says no on policy rather than on capacity to repay, a specialist or non bank lender may assess the same file on its merits. That access usually comes at a higher rate, so it is a trade worth making only where the alternative is worse, and it is often a bridge to returning to mainstream pricing later once the position improves. Going in with a clear exit plan matters more than the rate on day one.
If none of that works
If repayments are genuinely unaffordable rather than merely uncomfortable, act early and speak to your lender's hardship team. Every Australian lender has one and they are obliged to consider a hardship request properly. Early contact gives far more room than waiting until arrears build. Free financial counselling is also available and independent of any lender.
Run the numbers
Frequently asked questions
Will asking my lender for a better rate hurt my loan?
No. A rate review with your existing lender is not a new credit application, so it does not involve a new credit enquiry or a fresh serviceability assessment.
Does asking about hardship damage my credit file?
A hardship arrangement can be noted, but the alternative of falling into arrears is generally worse. Speaking to your lender early gives you more options than waiting.
Is a specialist lender a bad outcome?
Not necessarily. It is a higher rate in exchange for access when mainstream policy will not fit. Used deliberately, with a plan to move back once the position improves, it can be the sensible middle step.
Can I refinance if my property has not grown in value?
Possibly, but limited equity restricts your options and can trigger mortgage insurance on the new loan. A current valuation is the first thing worth checking.
Let us look at what is actually available
Being declined by one lender tells you about that lender's policy, not about the whole market. We can review where you stand, what your existing lender should be offering, and whether anything better is genuinely reachable from here.
Talk through my optionsGeneral information only. This article does not take your personal circumstances into account and is not credit advice. If you are in financial difficulty, contact your lender's hardship team or the free National Debt Helpline.
