REFINANCING

Sometimes, and sometimes not, which is the honest answer most sites avoid. It is usually worth investigating if you are rolling off a fixed rate, if your loan has been with the same lender for more than two years without a review, if your property value has risen enough to push you below the 80 per cent loan-to-value mark, or if you are carrying higher-cost debt that could be consolidated. It is often not worth it if you have a small remaining balance, if you are already at a competitive rate, if you would trigger fixed-rate break costs, or if your income or employment has changed in a way that would make a new assessment harder than your current position. We run the comparison including every switching cost and tell you the answer either way, including when the answer is to stay.

The costs are mostly small and predictable. Your existing lender charges a discharge fee, commonly in the range of $300 to $400, and there are state mortgage discharge and registration fees of roughly $100 to $200 each in Victoria. The incoming lender may charge an application or settlement fee anywhere from nil on a fee-free product up to around $800, and a valuation may be free or in the order of $200 to $400. As a rough total, a straightforward refinance commonly costs somewhere between $500 and $1,500. The exception is a fixed loan, where break costs are calculated by the lender based on movements in wholesale rates and can run into thousands, so those must be quoted by your lender before any decision. If your loan-to-value ratio is above 80 per cent, lenders mortgage insurance may also apply again with the new lender and is not transferable.

Typically four to six weeks, though it varies with the outgoing lender more than the incoming one. The application and approval usually run one to two weeks with complete documents, and the valuation happens in parallel. The step that consistently takes longest is the discharge, because your existing lender has to process a discharge authority form, and those queues can run two to three weeks on their own. The practical lesson is to lodge the discharge authority as soon as you have formal approval rather than waiting for the new lender to request it. We handle that sequencing for you and give you an update at each stage.

Usually yes, provided you have the equity and the lender is satisfied with the reason. The benefit is real and immediate, because unsecured debt generally carries a much higher rate than home lending, so consolidating typically cuts your total monthly outgoings noticeably. The catch that nobody mentions is the term. Moving a five-year car loan into a 30-year mortgage lowers the monthly payment but can increase the total interest paid over the life of the debt unless you deliberately keep repaying at the old level. We usually recommend consolidating into a split, so the consolidated portion sits on a shorter term rather than being absorbed into a 30-year balance. Some lenders also want evidence the underlying spending pattern has changed before approving.

It is a fair question and the safeguard is built into the law. As a credit representative, we operate under the Best Interests Duty, which legally requires the recommendation to serve your interests. There is also a practical safeguard: brokers face a clawback if a loan is refinanced away within roughly the first two years, so churning clients between lenders works against us financially. In practice, the first thing we do on a refinance enquiry is contact your existing lender and request a repricing on your behalf, which costs you nothing and quite often solves the problem without a switch. If we recommend moving, we show you the full cost comparison and the reasoning in writing.

Start about 60 to 90 days before the expiry date, not after it. When a fixed period ends, most loans automatically revert to that lender's standard variable rate, which is frequently well above what the same lender offers new customers, and it can happen without a phone call. Starting early gives you time to request a repricing from your existing lender, get a valuation done if your property value has moved, and complete a refinance before the reversion takes effect if the numbers justify it. Breaking a fixed loan before expiry is a different matter and can carry substantial break costs calculated on wholesale rate movements, so we always request that figure from the lender before considering it.