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There are four common reasons people refinance: a better rate is available, you’ve built equity you want to access, you want to consolidate debt, or your fixed term is ending. Refinancing is worth doing about half the time and the broker’s job is to tell you which half you’re in. Refinancing is roughly 25% of what we settle at Blutin Finance, second only to first home buyers. We’ll walk through each trigger, the math behind it, and the scenarios where we’ll tell you not to switch.
You’ve held your loan for a few years, you’ve watched the RBA move, and you suspect your rate is no longer competitive. That’s the most common refinance trigger we see.
Variable rates move with the cash rate. Fixed rates roll off into reversion rates that are usually less competitive than what’s offered to a new borrower. The question isn’t whether a lower rate exists; it usually does. The question is whether the rate gap, multiplied by your remaining loan balance and remaining term, exceeds the total cost of switching. Discharge fees from your current lender. Application and valuation fees with the new lender. Possible LMI if your loan-to-value ratio has shifted.
We compare your current rate against current offers across our 45+ lender panel, calculate the total switching cost, and work out the recovery period in months. If the math doesn’t recover the costs in a reasonable window, we’ll tell you. Sometimes the right play is to take a competitive offer to your current bank and ask them to match it.
You’ve owned your home a while, the market has moved, and the loan balance has come down. Now you want to put that equity to use, for renovations, an investment property deposit, your business, or another purpose.
Equity is the difference between your property’s current value and what you owe. Once your LVR sits below 80%, you typically have headroom to borrow against the equity. Drawing equity raises your LVR though, sometimes back above 80%, which means LMI re-enters the picture. The new loan amount must also service against the APRA 3% buffer (more on that below), and the purpose of the equity release affects which lenders will look at the application.
If you’re releasing equity for an investment property, interest deductibility on the released portion is a tax-structure question. Coordinate with your accountant on that side; that’s their lane, not ours. Our job is to find the lender and structure that fits your purpose.
Credit card balances, a personal loan, and a home loan all running in parallel can feel like a full-time job to manage. The math says combine them.
Rolling unsecured debt at high interest into a mortgage at single-digit interest looks compelling. The trade-off is the repayment term. A $20,000 card balance rolled into a 25-year mortgage often produces a higher total interest cost than aggressively paying down the card at the higher rate over three years, because you’ve extended the repayment period from 3 years to 25. There’s also a structural question: rolling unsecured debt against your home secures that debt against your property. Whether that’s the right move depends on your discipline, your cash flow, and the reason the debt accumulated in the first place.
The interest-deductibility position on consolidated debt also shifts depending on what’s being consolidated. That’s an accountant conversation, not a broker one. We’ll show you the structural choice and route the tax piece appropriately.
Your fixed term expires in a few months, your bank has flagged the roll-off, and you’re not sure whether to refix, switch to variable, or move lenders entirely.
Most fixed loans roll off into a “revert rate” that is rarely competitive. The lender’s bet is that you won’t refinance at roll-off, either through inertia or because the new rate isn’t visible until it kicks in. A meaningful percentage of borrowers don’t, which is why the revert rate exists at the level it does.
You have three options: refix with your current lender, switch to variable with your current lender, or switch lenders entirely. Each has costs. Refixing locks you in for another period; variable accepts rate-cycle risk; switching lenders means application, valuation, and discharge fees plus a fresh assessment. We model each path against your remaining term and balance and flag the one that pays off, including, sometimes, “stay where you are at the variable rate”.
Before recommending you switch, we apply the same pre-submission discipline we run on every Blutin client. For refinance specifically, the checks are:
That second check matters more than the rate-comparison check on most files. Sometimes the right move is to take a competitive offer to your current bank and ask them to match and we’ll tell you when that’s the play. If you want to model your own scenario before the first meeting, our borrowing power calculator is a useful starting point. The Honest Assessment is the discipline behind why 95%+ of the applications we submit are approved by at least one lender on our panel, refinance and otherwise.
There’s a structural reason this discipline matters more on refinance than on a new loan. Brokers operate under the Best Interests Duty, introduced 1 January 2021. Banks don’t. Your existing bank can’t legally recommend a competitor’s product even if a competitor would suit you better. Only an independent, accredited broker, bound by the Best Interests Duty, can put a competitor’s option in front of you and recommend it where it fits.
We don’t submit applications to be declined, and we don’t recommend refinances that don’t pay off. Concrete scenarios where The Quick No applies on refinance:
“Break costs that wipe out the saving.”
Break costs that wipe out the saving. Fixed-rate loans carry break costs if you exit before the fixed period ends. On a fixed loan with several years remaining, break costs can range from a few thousand to $30,000+ depending on the rate differential and balance. If the break cost wipes out three years of rate savings in a single fee, refinancing is the wrong move.
“LVR rising above 80% adding LMI.”
LVR rising above 80% adding LMI. If you’re refinancing for a better rate but due to valuation, your LVR changes from, say, 78% to 84%, LMI re-enters the picture. LMI on a $600,000 loan at higher LVR can run from several thousand into the $20,000+ range depending on the lender. We’ve seen scenarios where the LMI cost completely consumes the rate saving over the loan’s remaining life.
“Short remaining term.”
Short remaining term. If you have 8 to 10 years left on your loan and the switching costs total, say it’s $3,000, recovery alone might take 12 to 18 months. If the rate gap is small, that recovery window extends further. At some point the math says don’t switch.
“Serviceability fails the buffer.”
Serviceability fails the buffer. Occasionally a borrower with a flawless repayment history doesn’t qualify for the same loan amount under the APRA 3% buffer applied at a new lender. That’s not about you. It’s about how serviceability is required to be modelled.
When any of these scenarios show up in your numbers, we’ll tell you. Sometimes a quick no is the best answer.
A refinance isn’t a fresh application from a blank slate. It’s a transition: closing one loan with one lender, opening another with a different lender (or the same one), with the property already secured against the existing loan. The mechanics are different from a new home loan in two ways that matter.
First, your serviceability is re-assessed against the APRA 3% buffer at the new loan amount. If you’ve taken on additional commitments since you last applied, a car loan, a credit card, school fees, your borrowing capacity may have shifted, even though your home loan repayments haven’t. Second, the discharge-and-settlement process runs in parallel: the new lender’s settlement only completes when the old lender confirms discharge. We coordinate that handover so you don’t end up with two loans active at the same moment, or a settlement delayed because a discharge form sat on someone’s desk for a week.
For a straightforward refinance with a major bank, typically 3 to 5 weeks from application submission to settlement. Pre-approval often comes in 3 to 5 business days. The discharge process from your existing lender adds time at the back end. Complex cases like non-standard income, equity release, lender requiring property revaluation, can extend to 6 to 8 weeks. We give you a realistic timeline at the first meeting based on your specific situation and the lenders we’re considering.
Switching costs typically include: discharge fee from your current lender (around $350 per property), application fee with the new lender ($0 to $600 depending on the product), valuation fee (often waived in refinance promotions, otherwise $200 to $400), and government registration fees ($150 to $200). Total switching cost is usually $500 to $1,500 for a clean refinance. We disclose every fee upfront, and our broker fee is paid by the lender at settlement, not by you, disclosed in your Credit Proposal Document before any application is submitted.
The application itself creates a credit enquiry, which can cause a small short-term dip in your credit score. The discharge of an old loan and opening of a new one is a normal account management event and doesn’t on its own damage your credit profile. Where credit scores genuinely suffer is when borrowers shop multiple lenders simultaneously — five enquiries in a month signals financial stress to credit bureaus. We submit one application to one lender we’ve assessed as the right fit, which is the cleanest path through.
Once a year is sensible. Rates move, your equity position shifts, your income and expenses change, and lenders introduce new products. A review doesn’t mean refinancing every year; it means knowing whether your current loan is still competitive. We offer post-settlement reviews (every 6 months) to clients we’ve placed, and we’re happy to review a loan we didn’t originally write. The review itself doesn’t cost you anything.
Yes. Self-employed borrowers refinance regularly. The assessment generally requires more documentation than a PAYG borrower (typically two years of business financials and tax returns, plus BAS statements for some lenders), and lender appetite varies meaningfully. Some major banks have stricter self-employed policy than specialist non-bank lenders who actually read the cash flow rather than averaging tax return income. Self-employed lending is a Blutin specialty, over 95% of the self-employed clients we take on are successfully placed with a lender on our panel.
LVR is loan-to-value ratio: the percentage of the property’s current value that the loan represents. Calculated as loan amount divided by property value times by 100. Example: a $640,000 loan on a property valued at $800,000 is an 80% LVR. LVR matters for refinance because it determines whether LMI applies (typically required above 80% LVR), which lenders will consider the application, and what rate tier you qualify for. Property values change between applications, so the LVR at refinance is calculated against the current valuation, not the purchase price.
Take the matched offer. Genuinely. The whole point of comparing rates and bringing a competitive offer to your existing bank is to get the best deal and if your bank matches it, you’ve achieved the goal without the costs and time of a discharge and settlement process. We tell clients this directly. Sometimes the right outcome of a refinance conversation is no refinance, but a better rate at your current bank. We’re not paid for the conversation either way; the broker commission only triggers when a new loan settles. If your bank matches and you stay, that’s a win for you.
Book a 30-minute first meeting. We’ll look at your current rate, your remaining balance, your equity position, and what’s available across our 45+ lender panel. If refinancing pays off, we’ll show you how. If it doesn’t, we’ll tell you that too. No fee to find out.