What happens when you refinance your home loan?

By Fornaro | 01 April 2026

With interest rates rising, many Australians have seen their mortgage repayments increase. It’s no surprise more homeowners are asking a simple question – is my home loan still working as hard as it should?

Refinancing activity suggests many are deciding it’s worth a closer look. More than 640,000 borrowers refinanced last year, a clear signal that reviewing your loan is no longer optional – it’s prudent.

So what does refinancing actually involve, and when does it make sense?

WHY HOMEOWNERS REFINANCE

Refinancing means replacing your existing home loan with a new one, usually with a different provider. Your new loan pays out the old one and takes its place as your ‘home loan’.

Common reasons include:

• Securing a more competitive interest rate
• Reducing mortgage repayments where possible
• Adjusting loan terms – such as shortening the loan term to pay it off sooner
• Accessing equity for renovations, investments or other major expenses
• Changing loan structure – for example variable to fixed
• Accessing features like offset accounts or redraw facilities

The reason is different for everyone. What matters is whether the outcome improves your overall position.

HOW REFINANCING WORKS

Refinancing follows a similar process to applying for your original loan, but it’s usually more straightforward when guided properly.

Reviewing your goals
We start by understanding why you’re looking to refinance and what you are trying to achieve by doing so. We’ll also factor in any potential costs, including valuation fees, exit costs or fixed‑rate break fees as part of our financial analysis
Compare the market
We assess a wide range of lenders and loan structures to identify options that genuinely suit your circumstances – not just headline rates.
Prepare your documents
Similar to your original application, you’ll need to provide supporting documents like proof of identity, income details, employment information, and a summary of your assets and debts to the lender to support your application.
Submit the application
Once lodged, the lender will assess your application and typically arrange a property valuation. If you’re borrowing more than 80 per cent of the property value, lenders mortgage insurance may apply.
Approval and settlement
Once your loan is approved, you will review and sign your new home loan documentation and the new lender will settle the loan. This means they will pay out your existing loan to the relevant lender, and take a mortgage out over your property/s. From there, your new loan is in place.

CAN YOU STAY WITH YOUR CURRENT LENDER?

Yes – and sometimes that’s the right outcome.

If your loan still suits your needs and the pricing is competitive, staying put can make sense. However, loyalty doesn’t always equal value. Many long‑term customers discover newer borrowers are offered sharper rates or incentives than what their lender is prepared to offer them.

Reviewing your options gives you leverage – whether that’s renegotiating with your current lender or moving to a new one. Either way, you’re making an informed decision.

WHAT ABOUT CASHBACK OFFERS?

Cashback incentives can be appealing. Eligibility criteria can be strict, and the loan itself may or may not be the best long‑term fit.

As part of our process, we will always compare the full picture including rates, costs and incentives to give you a complete comparison of your options. This lets you make the best decision for your situation.

IS NOW THE RIGHT TIME?

Refinancing is never about timing the market perfectly. It’s about ensuring your loan remains aligned with your goals, especially as conditions change.

With rates higher than they’ve been in years, reviewing your home loan is simply good financial housekeeping.

If you want to know whether refinancing makes sense for you, have a conversation with us. Our decades in the game means you don’t have to work this out alone.