Home / Straight Answers / Refinancing
Straight Answers · Refinancing
What does refinancing actually cost?
Bayley Clarke · Mortgage broker on the road · Last checked 18 August 2026 · 5 min read
The short answer
For most people: a discharge fee from the old lender, small government fees, and a few weeks of paperwork. Often that's the whole bill, and the new lender sometimes covers part of it.
The costs that actually bite are the two nobody mentions in the ads: break costs if you're walking out of a fixed rate, and lenders mortgage insurance if your equity is under roughly 20 per cent. And the quietest cost of all isn't a fee. It's letting the refinance stretch your loan back out to a fresh 30-year term.
The bill, line by line
- Discharge fee, old lender. Usually a few hundred dollars for the admin of closing your loan. Fixed by your loan contract, so it's a known number, not a surprise.
- Government fees. Registering the new mortgage and discharging the old one with the state. Small, and unavoidable.
- New lender fees. Application and valuation fees exist on paper, but lenders competing for refinance business frequently waive them. Part of my job is knowing who's waiving what this month.
- Your time. From application to settlement, four to six weeks is typical, and the new lender does most of the heavy lifting. You gather documents once.
"I'm on a fixed rate, can I even leave?"
You can, but this is where the real money hides. Break a fixed rate early and the lender charges you their loss on the funding they locked in for you. Depending on how rates have moved and how long is left on your term, that can be trivial or it can be thousands. Get the break cost from your current lender before you do anything else. It's one phone call, the number is exact, and everything else gets decided with that number on the table. Sometimes it's worth paying. Sometimes the maths says wait out the term. Both are fine answers, but only if you actually got the number.
The LMI trap under 20 per cent equity
Lenders mortgage insurance isn't just a first-home-buyer thing. If your equity is under roughly 20 per cent of the property's current value, a new lender can charge LMI on the refinance, even though you may have already paid it once on the original loan. It doesn't transfer between lenders. If you're anywhere near that line, we check your equity position before anything gets lodged, because a valuation that comes in soft can turn a money-saving refinance into a money-costing one.
The cost nobody prices: the term reset
Refinance with twenty-four years left on your loan and most lenders will happily write the new one over thirty. Your repayment drops and it feels like a win. It isn't. You just bought six extra years of interest. You don't have to accept it: you can match your remaining term, or shorten it while the rate improvement covers the difference. Do it once, do it right.
Same logic applies to rolling credit cards or a car loan into the refinance. The rate drops, but short debt becomes 30-year debt unless you keep paying it down fast. That's a whole decision of its own, and it's separate from whether to refinance at all.
One more: a credit check happens, and that's fine. One application through a broker means one inquiry. What dents a credit score is spraying applications at multiple lenders yourself.
When refinancing is the wrong move
- The break cost eats the benefit. Deep into a fixed term, the maths often says stay. I'll tell you that in the first call.
- Your equity is under the LMI line. Paying LMI twice to save on rate rarely works. Waiting for the loan balance or the market to move can be the better play.
- You're about to change jobs or go out on your own. Lenders assess the income you have at application. Refinance first or wait until the new income has history.
- A cashback is the only reason. Cashback offers come and go, and whether one is even taxable depends on your setup. Ask your accountant. Move for the loan, not the sweetener.
Want the actual numbers for your loan?
Half an hour and I'll build your bill in front of you: discharge fee, break cost, equity position, and what the move saves against what it costs. If staying put wins, you'll hear that too.
No application, no credit check, nothing on your file. Just the numbers.
Next question
Should I go fixed or variable?The other half of every refinance conversation, and the one where guessing about rates gets expensive.
Related answers
Does my credit card limit affect my borrowing power? Does a car loan stop me getting a home loan?Got a question this page didn't answer? Send it to me and it goes on the list.