When would I refinance my mortgage?


Whenever it makes financial sense to do so.

In previous days, when you took out a mortgage, you kept it with the same lender until it was entirely paid off. However, now we are in a different time, where people refinance their mortgage frequently for many reasons. In fact, the average period of a home loan in Australia is now 4-5 years. Below are some of the reasons why you may decide to refinance your mortgage.

Lower rate

Commonly, people chose to refinance their home loan because they don’t feel like they are getting a good deal. However, it is important not to become rate driven. You need to consider more than just the interest rate, for instance, other fees and charges, and loan structure. You need to work out if the lower interest rate outweighs the fees and charges involved with refinancing. It is essential to make sure you are refinancing to be better off in the long run.


When taking out a home loan, most people don’t understand the ins and outs of the features of the product. For example, you may want the option for a redraw facility, and without realising your home loan may not offer that feature. When you go to utilise the redraw facility that you thought you had, the bank may tell you that they can’t do it or that there will be a fee. Not all features are available with every product. Therefore, you may wish to refinance to a more suited home loan which will increase your flexibility.


If you have decided to renovate your home, it may be a good idea to refinance your home loan to take out a construction loan, which only requires you to pay interest as the build progresses. Once the renovations are complete, you may wish to refinance the loans again to consolidate the original loan and the construction loan. Consolidating the loans will minimise the interest you pay.

Home equity

It’s no secret that property prices have increased significantly over recent years. For example, if you purchased a home five years ago for $400,000 it might now be worth $600,000 (or more). Refinancing might allow you to tap into that $200,000 equity.


Once you’ve taken out a home loan, you may realise that you’ve borrowed more than you can repay, comfortably. If you’re finding it hard to stay on top of your home loan repayments, don’t sit and suffer in silence, get in touch with a finance broker who may be able to refinance your home loan and make it more manageable for you.

If you’ve found this blog helpful, you’ll also enjoy the latest updates, news & tips from our monthly newsletter. Click on our homepage to subscribe.