Home Loan Refinancing Checklist Australia: Costs, Documents and Steps

Short answer

Before refinancing, compare the new loan over the same remaining term, collect every switching cost in writing and check how long the repayment reduction would take to recover those costs.

Start with the Refinance Break-even Calculator. Its result is indicative. A lender still makes its own credit, serviceability and property assessment, and a lower advertised rate does not guarantee a lower total cost.

The seven-number check

Record these figures before comparing loans:

1. Current payout balance, not the original loan amount.
2. Current interest rate and regular fees.
3. Remaining loan term.
4. Discharge fee and any fixed-rate break cost quoted by the lender.
5. New interest rate, comparison rate and regular fees.
6. Application, valuation, settlement, registration and package costs that apply.
7. How long you realistically expect to keep the new loan.

Keep the remaining term the same in the first comparison. Resetting a 22-year balance to a new 30-year loan can reduce the monthly repayment while increasing the time interest is charged.

Costs to confirm in writing

Moneysmart tells borrowers to check whether the benefits of switching outweigh the costs. Its switching guidance identifies fixed-rate break costs, discharge fees, new application fees, internal switching fees, possible mortgage duty and LMI as items that can affect the result.

Do not rely on a generic allowance where a quoted amount is available. Ask for:

• a current payout or discharge quote from the existing lender;
• a fixed-rate break-cost quote if the fixed period has not ended;
• the new lender's application, valuation, settlement and ongoing fees;
• state or territory mortgage registration and discharge charges;
• any LMI estimate if the new loan may be above the lender's no-LMI threshold;
• any cashback conditions, including a possible repayment or clawback term.

Enter the total cost that applies to your scenario into the Refinance Break-even Calculator. A cashback should only be included when its terms and payment are clear.

Documents lenders may request

Requirements vary by lender and borrower. A practical file commonly includes:

• identity documents;
• recent income evidence or business financial records;
• current home-loan statements and a payout figure;
• statements for credit cards, personal loans and other debts;
• declared living expenses;
• property, rates, strata and insurance details where requested;
• evidence explaining any irregular transactions, gifted funds or large liabilities.

The new lender may also order its own valuation. An online property estimate or the purchase price does not bind that lender.

Refinancing process, step by step

1. Ask the current lender for a review

Moneysmart suggests asking the current lender for a better deal before switching. Compare any retention offer against the external option using the same balance, remaining term, fees and loan features.

2. Compare like with like

Check whether both loans have the features you actually use, such as an offset account, redraw, extra repayments or a fixed-rate period. Use the Loan Comparison Calculator for rates and fees, then the Mortgage Repayment Calculator to inspect the repayment schedule.

3. Check equity and possible LMI

A new lender may use a different property valuation. If the new loan is above its accepted LVR threshold, fresh LMI may apply even if LMI was paid on the old loan. Use the LMI Calculator for a general scenario, then obtain the lender's figure.

4. Apply and wait for the new assessment

Refinancing is a new credit application. The lender may assess income, expenses, debts, credit history, property acceptability and serviceability. An estimate, rate quote or existing approval does not guarantee the refinance will be approved.

5. Complete discharge and settlement instructions

Once the new loan is formally ready, the existing lender and new lender coordinate payout and mortgage registration. Follow their instructions and keep enough money available for any fees not added to the new loan.

6. Check the first repayment and account setup

After settlement, confirm the old loan is closed, the new balance and rate are correct, direct debits are moved and salary or savings are sent to the intended offset account. Download old statements before online access ends.

Worked comparison

Assume a borrower has $600,000 outstanding, 22 years remaining and a 6.50% current rate. A new lender quotes 6.10% with $1,200 in total switching costs and no cashback.

Using a standard principal and interest calculation:

At $144 a month, $1,200 of switching costs would take roughly nine months to recover after rounding. The real result may differ because lender interest methods, payment dates, fees, valuation, rate changes and loan features vary.

If the same new balance were stretched to 30 years, the repayment would look lower, but that is not a like-for-like comparison. First test the 22-year term, then separately decide whether changing the term fits the borrower's circumstances.

Extra checks for fixed, offset and investment loans

For a fixed loan, use the lender's break-cost quote because it can change with market rates and time remaining.

For an offset account, record the balance separately. Moving to a loan without a full offset can change the effective interest cost even if the headline rate is lower.

For an investment loan, refinancing, redraw and equity release can create tax record and loan-purpose issues. ATO Taxation Ruling TR 2000/2 says a redraw is a separate borrowing and interest treatment depends on how those funds are used. Keep loan purposes separate and obtain registered tax advice before changing an investment debt structure.

When a switch may not recover its costs

A refinance may fail the break-even test where:

• the borrower expects to sell or repay the loan before break-even;
• fixed-rate break costs are large;
• the new loan triggers fresh LMI;
• the rate difference is small after ongoing fees;
• a useful offset or repayment feature is lost;
• the new term is longer and the borrower only compares the first repayment;
• debt consolidation turns short-term debt into interest charged over many years.

The answer depends on the full loan terms and borrower circumstances. This checklist does not recommend switching or staying.

Sources

• ASIC Moneysmart: switching home loans, including fees, LMI, current-lender negotiation and remaining-term checks. Checked 15 July 2026.
• ASIC Moneysmart: mortgage switching calculator, including modelling assumptions and lending-criteria limitations. Checked 15 July 2026.
• ATO Taxation Ruling TR 2000/2, including the treatment of redraws as separate borrowings. Checked 15 July 2026.

General information disclaimer

This checklist provides general information only. It is not financial, credit, tax or legal advice, a loan offer or an approval. Rates, fees, valuations, LMI, break costs, tax treatment and lender requirements vary. Obtain written figures from the relevant lender and licensed professional before acting.