Loyalty to your current lender doesn't usually come with a discount. If it's been a while since you last reviewed your home loan, here's how to tell whether refinancing is worth exploring.
Signs it might be worth a look
- You haven't reviewed your rate in more than a year or two.
- Your property has likely increased in value, which could improve your loan-to-value ratio and open up better rates.
- Your income or financial position has improved since you took out the loan.
- You want features your current loan doesn't offer, like an offset account or more flexible repayments.
- You're looking to consolidate other debts into a single, lower-rate facility.
What to have ready
Refinancing generally requires similar documentation to your original application: recent payslips or income evidence, bank statements, details of your current loan, and information on any other debts. Having these ready before you start speeds up the comparison and application process considerably.
Weigh the costs against the benefit
Refinancing isn't always free. Depending on your current loan, you may face discharge fees, and a new loan may involve application or valuation fees. If you're on a fixed rate, breaking it early could also involve a break cost. A worthwhile refinance is one where the savings or benefits outweigh these costs over a reasonable timeframe, which is exactly the calculation worth doing before you commit.
It isn't only about the rate
A lower rate is the most visible reason to refinance, but it isn't the only one. Switching lenders can also unlock better features, a structure that suits a change in your circumstances, or access to equity for a renovation or investment. It's worth considering the full picture, not just the headline rate.
A quick way to find out
Rather than guessing whether refinancing makes sense, a free home loan health check compares your current loan against what's available and gives you a clear answer either way, including if staying put is the better move.
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