Refinancing
When refinancing actually saves you money (and when it doesn't)
6 min read · By Daniel Lagden · 22 April 2026
The short version
- The rate is only the third or fourth thing that matters in a refinance.
- Refinancing wins when structure, fees and net savings beat the friction of moving.
- Factor discharge, settlement and registration fees before deciding.
- Sometimes the smart move is a rate review with your current lender, not a switch.
Refinancing is one of the most over-pitched and under-explained moves in personal finance. Almost every comparison site treats it as a rate-shopping exercise: cheaper rate, switch lender, done. In reality, the rate is the third or fourth thing that matters.
When refinancing genuinely saves money
- Your current rate is 0.5%+ above what a comparable lender would offer you today.
- You're paying for features (offset, redraw, multiple splits) you don't use.
- You've built equity and want to access it cleanly.
- You're coming off a fixed rate and the revert rate is uncompetitive.
When it usually doesn't
- You'd switch from a fee-free loan to a packaged loan with a $400/yr annual fee for a 0.1% rate saving.
- Your loan balance is under $250k; the absolute dollar saving rarely justifies the admin.
- You'd reset a 25-year loan back to 30 years; the lifetime interest goes up, even at a lower rate.
Hidden costs to factor in
Discharge fees ($350–$600), settlement and registration fees (~$400 total), valuation (often waived), and the time cost of getting your file ready. Net it all out before deciding.
Our rule of thumb: refinancing is worth it when the structural fit and net dollar saving over 24 months together beat the friction of moving. If the answer is 'stay where you are and ask for a rate review,' we'll say that.
Frequently asked questions
How much does it cost to refinance?
Typical costs include a discharge fee from your current lender ($350–$600), settlement and registration fees (around $400 combined), and sometimes a valuation, though that's often waived. If your new loan would be over 80% LVR, LMI can also apply again.
Will refinancing hurt my credit score?
A refinance application involves a credit enquiry, which can have a small, temporary effect. Applying to multiple lenders at once does more damage than a single, well-targeted application.
Should I refinance or just ask my lender for a better rate?
Often a 'repricing' request to your existing lender is quicker and cheaper than switching, especially for smaller balances. If they won't sharpen the rate enough, refinancing becomes the lever. We usually try a rate review first.
