Refinancing
Refinance Your Home Loan in Australia | Better Loan & Features Options
Refinancing your home loan is a strategic financial move that allows you to swap your current loan with a new one, often to secure a lower interest rate, reduce your monthly repayments, or unlock equity. Whether you are seeking cash-out for renovations, buy another investment property or simply want a better deal, Laxmi Home Loans can help you compare options from 50+ banks and lenders to find the right solution for your financial goals.-----3 Strong Points to Consider Before Refinancing Your Home Loan.
Before switching lenders, ensure you consider the following three critical factors that impact your overall savings:
Review All Switching Costs
Before refinancing, consider every cost involved, including discharge fees from your current lender and application or settlement costs from the new one. Even with a lower interest rate, high fees can reduce or eliminate your overall savings.
Compare Savings with Your Break-Even Timeline
Estimate how long it will take for your interest savings to recover the refinancing costs. If you plan to sell or refinance again in the near future, the financial benefit may be limited.
Choose Features That Support Your Future Goals
Focus on loan features beyond just the rate, such as offset accounts, redraw facilities, and flexible repayment options. These can improve cash flow management and provide long-term financial advantages.
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Refinancing
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Frequently Asked Questions
Is refinancing worth it?
Refinancing is worth it when the savings or strategic benefit clearly outweigh the switching costs. It is not always the right move, so the answer depends on your situation.
Refinancing usually pays off when:
- Your current rate sits well above what is available in the market today
- You have built up enough equity to drop below 80 percent LVR and avoid LMI
- You want to access equity for renovations, an investment property, or debt consolidation
- Your fixed rate is ending, and you want to lock in a better deal
- You need features your current loan does not offer, such as an offset account or free redraw
- Your circumstances have changed, and you want to restructure repayments
Refinancing may not be worth it when:
- Your loan balance is small, and the savings will not cover the switching costs
- You are still inside a fixed term with high break costs
- You have less than 20 percent equity and would trigger a new LMI premium
- Your credit profile or income has changed, and a new application could be declined
- You plan to sell the property in the next 12 to 24 months
Before you refinance, you should check the discharge fee from your current lender, the application and settlement costs at the new lender, any government registration fees, and whether LMI applies. A simple break-even calculation will tell you how many months it takes for the lower repayments to recover those costs. If you save the costs back within two years and plan to keep the loan longer than that, refinancing is generally worthwhile.
At Laxmi Home Loans, we run this comparison for you across our panel of 50-plus banks and lenders, so you can see the real savings in dollars before you commit. If the numbers do not stack up, we will tell you to stay where you are.
Does refinancing cost anything?
Yes, refinancing does cost money, but the fees are usually smaller than people expect and are often recovered within the first year of savings. Here are the typical costs you should budget for:
Fees from your current lender
- Discharge fee, usually 150 to 400 dollars
- Fixed rate break cost, only if you are still inside a fixed term, and this can range from a few hundred to several thousand dollars
- Settlement or admin fee, around 100 to 300 dollars
Fees from your new lender
- Application or establishment fee, often 0 to 600 dollars, and many lenders waive this
- Valuation fee, often free as part of a refinance offer
- Settlement fee, around 100 to 350 dollars
- Lenders Mortgage Insurance, only if your loan sits above 80 percent of the property value
Government fees
- Mortgage registration fee, around 150 to 230 dollars, depending on your state
- Mortgage discharge fee, similar amount
- Title search fee, a small charge, usually under 50 dollars
Other possible costs
- LMI on the new loan if your equity is below 20 percent
- Cashback offers from the new lender that can offset most of these fees, often 2,000 to 4,000 dollars, when available
In most refinance deals we arrange, the total out-of-pocket cost sits between 600 and 1,000 dollars when no fixed break cost applies. Many of our clients pay nothing upfront because the new lender offers a cashback that covers the switching fees and leaves money in their account.
The real question is not what refinancing costs, but how quickly the lower rate or better structure pays those costs back. If the savings recover the cost within 12 to 18 months and you plan to keep the loan beyond that, refinancing is worth it.
At Laxmi Home Loans, we give you the full cost breakdown in writing before you decide, so there are no surprises. We also check current cashback offers across our panel of 50-plus banks and lenders to reduce your out-of-pocket spend.
How long does refinancing take?
Typically 2-4 weeks from application to settlement. We handle all the paperwork.
Can I refinance if I'm self-employed?
Yes, you can refinance as a self-employed borrower. Lenders treat self-employed applications differently to PAYG, but plenty of options exist across our panel of 50-plus banks and lenders.
What lenders look for
- One/Two years of trading history under the same ABN, ideally in the same industry
- One/Two years of personal tax returns and notices of assessment
- One/Two years of company or trust financials if you trade through a structure
- Business bank statements, usually the last six months
- BAS statements, sometimes requested for recent quarters
- A clear pattern of income that supports the loan repayments
- If you are taking a salary for over six months, some lenders accept it as well.
How lenders calculate your income
Lenders take the lower of your last two years of taxable income, or the average of the two years if income is rising steadily. They also add back certain non cash expenses such as depreciation, interest on the loan being refinanced, and one off costs. This means your assessable income for the loan is often higher than the bottom line on your tax return.
Low doc options
If you do not have two years of tax returns, low-doc refinancing is still possible. Lenders can accept:
- One year of tax returns and notices of assessment
- BAS statements for the last 6 to 12 months
- An accountant’s declaration confirming your income
- Business bank statements showing consistent turnover
Low doc loans usually carry a slightly higher rate and may require a larger deposit or lower LVR, often capped at 80 percent.
When refinancing makes sense for self-employed borrowers
- Your current lender no longer offers a competitive rate for self-employed clients
- You want to consolidate business and personal debt into one manageable repayment
- You need to release equity for business expansion, equipment, or working capital
- You want to switch from a low doc loan to a full doc loan now that your tax returns support it, which usually means a much sharper rate
- You want to add an offset account to park business cash and reduce interest
What can make it harder
- A recent drop in income on your latest tax return
- Tax debt owed to the ATO that has not been paid or placed on a payment plan
- Mixed personal and business spending on the same account, which makes the assessment messy
- A short trading history of under 12 months
How we help
We know which lenders on our panel of 50-plus banks and lenders are flexible with self-employed income, which ones add back the right expenses, and which ones move quickly with low doc applications. We package your file properly the first time so the assessor sees the strongest version of your income, not the lowest.
Ranked 18 in Australia Top 20 Mortgage Brokers by RateMyAgent 2026, we have refinanced hundreds of self-employed clients, including sole traders, contractors, company directors, and trust structures.
For a free self-employed refinance review, visit www.laxmihomeloans.com.au or book a call with our team.
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