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Refinancing your home loan with a broker: how it actually works

Q: How much does it cost to refinance a home loan?

Budget $1,000 to $1,200 per property for discharge, government and new lender fees, and the new lender often waives part of that. The two costs that can blow that number out are break costs if you are leaving a fixed rate, which you get in writing first, and lenders mortgage insurance if your loan is over 80% of the property's value, because LMI does not transfer between lenders.

Bayley Clarke · Mortgage broker on the road · Last checked 6 September 2026 · 8 min read

The short answer

A refinance is a brand new loan with a bank that has never met you, and the first move is usually not a refinance at all.

What a refinance home loan broker does that a branch can't: rings your current bank for a discount before anything else, prices the switch against a whole panel of lenders instead of one, checks whether a lender will actually take you before your credit file gets touched, and moves you again later when the loan stops fitting. This page is that process in order. Reprice first. Price the switch. Clear the two gates. Then, and only then, the move.

The one question behind every refinance

Strip away the ads and the cashback offers and a refinance comes down to one question: is the switch worth more than it costs? That question has three parts, and most people only ever look at the first one.

The first part is the rate gap, and it isn't a fixed amount of money. A quarter of a percent on a $300k loan is roughly $750 a year. On a $600k loan it's roughly $1,500. Same headline, double the dollars, and the only thing that changed was the balance. The second part is the switching cost, which I budget at $1,000 to $1,200 per property. The third part is the one that catches people who have never missed a repayment in their lives: will a new lender actually take you? A refinance is a full income and borrowing capacity assessment, all over again, run on today's numbers with a buffer on top.

Everything else on this page is one of those three parts wearing a different outfit. Once you've got the frame, the rest is just order of operations.

The four moves in a refinance

1. Reprice first. Before anyone fills in an application, somebody rings your current bank and asks for a discount. That can be me on your behalf, or you calling the retention team yourself. Nothing changes about the loan: same bank, same account, lower rate, no cost, nothing on your credit file. The bank would rather hand out a discount than lose the loan, which is the whole reason a retention desk exists. Most quarters, for most of my clients, this is the only step that happens. If a broker's first move is always a refinance, ask why. The bank pays commission on a new loan and nothing on a reprice. Reprice versus refinance is the order, every time.

2. Price the switch. If the reprice doesn't get you to where the market is, or the bank says no, now we cost the move. A discharge fee from the old lender, government fees to register the new mortgage and release the old one, and any application or valuation fees at the new bank, which lenders competing for refinance business frequently waive. That's the $1,000 to $1,200 budget, per property, so two securities roughly doubles it. Then the two costs the ads never mention: break costs if you're walking out of a fixed rate, which can be trivial or thousands and which you get in writing before deciding anything, and lenders mortgage insurance if your equity is under 20%, because LMI does not transfer between lenders. Put the annual saving next to the total cost and you get a break-even in months. Under a year, generally an easy yes. Pushing two years, the juice isn't worth the squeeze. And on the broker side there's clawback: if you leave inside 12 months the bank takes back every dollar it paid me, and half of it between 12 and 18 months. None of that is charged to you, but it's a fairly strong incentive for me to get it right the first time.

3. The LVR gate. A new lender values your property as it stands today and divides your loan by that number. Not by what the agent down the road reckons it'd sell for. Bank valuations run on settled data, so they lag the market, and you don't get a vote. Under 80% is the standard mortgage. 70%, 60% and 50% are the tiers below it, each with slightly sharper pricing because the bank has less at stake. Above 80% you're in 90% and 95% territory: higher rates, extra fees, and LMI all over again even if you paid it once before. Two things follow. If growth or a renovation has pushed you down a tier, a revaluation can drop your rate without a refinance at all. And if a soft valuation has pushed you over 80, you can still refinance, but the LMI and the pricing usually eat the benefit, so the honest answer is often to wait for the number to move.

4. The affordability test, again. The new bank goes back to the drawing board on income, debts and how the household spends, then adds a buffer on top of the interest rate, generally 3%, to prove you could still pay if rates went up. This is why people who've never missed a repayment get knocked back: the test isn't whether you're paying the loan, it's whether you could pay it at 3% more with today's income and today's living costs. The escape hatch is the reduced buffer. A lot of lenders now assess a clean refinance at 1% above the rate instead of 3%, if you fit their gates: clear repayment history, loan open at least 12 months, not increasing the amount, and nearly always under 80% of the property's value. On top of that sits the credit file. One refinance enquiry is housekeeping, but the story underneath the score is what the lender reads, and the fast, low-buffer products carry their own credit tests. Parental leave isn't a no either, provided we can show the return-to-work income and some savings to cover the gap.

Four moves, in that order. Skip the first and you might pay to move for a discount you could have had for a phone call. Skip the last and you find out mid-application that the bank you chose won't take you. Which brings us to the bit that actually changes outcomes.

Same loan, different lender, different answer

Here's the part a branch can never show you, because a branch only has one set of rules: every lender sets every one of those dials itself. The same loan, the same house and the same payslips get four different answers on the four moves above depending on where you walk in.

Take the valuation. Some lenders will reprice you into a lower LVR tier off a free desktop valuation. Others want a full valuation before they'll move. A few don't reprice existing customers on LVR at all, which turns a five-minute win into a refinance conversation. Illustrative numbers, not a quote: $500k owing on a place one valuer calls $625k is an 80% loan and a standard refinance. The same loan on a place the next valuer calls $600k is 83%, and now LMI is back in the maths. Nothing about you changed. The valuer did.

Take the buffer. The standard test is 3% above the rate. A couple of non-bank lenders assess at 2% as their everyday setting. The 1% refinance paths are a longer list, but the gates are written separately by every lender: some want owner-occupied and principal and interest only, some cap your total debt against your income, most cap cash-out at a few thousand dollars, and one major pulled its reduced-buffer path altogether in mid 2026. So "why won't the bank refinance me" is very often "that bank won't, this one will".

Take cash-out. Under 80%, a good chunk of the panel will release equity with no dollar cap and just a purpose recorded. Others cap it, anywhere from around $100k up to a million, before they want to see quotes or a contract. Above 80%, several lenders stop at around $100k, some at a percentage of the property's value, and nearly all of them want evidence for every dollar. Rolling a car loan and a card into the home loan runs into exactly the same gates.

Even the LMI ceiling isn't one number. At some lenders the stated maximum already includes the capitalised premium. At others the premium sits on top. Two lenders quoting the same maximum can leave genuinely different room to move. None of this is on a comparison site, and nobody in a branch is going to mention that the lender down the road would have said yes. Which is the job.

The questions, one by one

Each of these has its own full answer, in the order they tend to come up. Find where you're at and go down a level.

Repricing versus refinancing: which one should I do first?

Reprice first. It costs nothing and can be free money on the floor. Refinancing is the full move to another lender, and it only happens if the reprice doesn't get you there and the switch clears its costs.

Should I call my bank's retention team myself?

Yes, why not. Don't ask, don't get. Have a real offer in front of you when you ring, and check what the discount is measured against before you take it.

What does refinancing actually cost?

For most people a discharge fee, small government fees and a few weeks of paperwork. The costs that bite are break costs on a fixed rate, LMI under 20% equity, and quietly resetting the loan to 30 years.

Is it worth refinancing for a quarter of a percent?

Depends entirely on your balance. The saving needs to be well and truly more than the $1,000 to $1,200 it costs to switch, and the arithmetic is one line.

When is refinancing a bad idea?

When there's no financial benefit after switching costs and no other reason to move. Chasing a sliver of rate that takes two years to pay for itself is the classic version.

My fixed rate is ending. What should I do?

Start three months out. Do nothing and you roll onto the revert rate by default. Ask your bank in writing, look at the market, and have the switch approved and timed for the day after expiry.

I've never missed a repayment, so why won't the bank refinance me?

Because it's a full assessment all over again, with a buffer of generally 3% on top of the rate. The reduced-buffer paths at 1% are the fix, if you fit the gates.

What's an LVR tier, and can I get revalued into a lower one?

Banks price in bands: 80% is standard, 70, 60 and 50 sit below it, 90 and 95 above. Growth or a renovation that drops you a tier can get you repriced without moving. The valuation decides it.

Can I refinance if my value dropped or my LVR is over 80%?

Yes, but LMI may be added again and loans above 80 are priced higher, so a lot of the time there's no benefit left. You've got to make sure it makes sense, and for plenty of people it doesn't yet.

What is a rate lock, and should I pay for one?

A fee so the bank can't change your fixed rate between application and settlement. Some lenders honour the rate from approval for free; for most, it's pay the fee or leave it to chance.

Do I have to stay with my bank for a minimum period, and what is clawback?

No minimum on a variable rate. Clawback is the bank taking back the broker's commission if you leave inside 12 to 18 months. It never costs you anything, but I'd rather hear about a change from you first.

Does refinancing put me back to a 30 year loan term?

Not unless you let it. The application defaults to 30, and defaults can be overwritten. Match your remaining term, shorten it, or reset and keep paying the old amount.

The honest part

Plenty of refinances shouldn't happen, and I'd rather say so here than halfway through an application. If you're on a fixed rate and the break cost is bigger than the saving, wait out the term. If the loan is small, the switching cost can eat a year of savings before you've broken even. If you're likely to sell inside a couple of years, you may never earn the move back. If a valuation puts you over 80%, you'd be paying LMI twice for the privilege of a higher rate. And if your current lender has repriced you to within a whisker of the market, take the win and put a note in your calendar to ask again.

The other honest bit is about me. Clawback means a refinance that leaves inside 12 months cost me everything I was paid for it. That's why I ask clients to stay a couple of years, review the loan every three months, and ring me before they ring the discharge team. But it's your loan. If leaving is right for you, leave. I'll wear it.

What to bring, and the question to ask

Three things. Your latest home loan statement, including the bit that says what's available, because money you've paid ahead changes how the switch is set up. A rough idea of what the place is worth, and a recent agent appraisal is fine for that even though the bank won't use it. And a couple of payslips, because move four is an income test whether you like it or not.

Then the question to ask isn't "what's your best rate". Every bank has a best rate, and it lives in the window for new customers. The question is "what would you move me to, what does it cost to get there, and what did my own bank say first?" If the answer starts with an application instead of a phone call to your current lender, you're being sold a refinance rather than shown one. And the honest release valve on my side: if I can't beat what you're on after the reprice, I'll tell you to stay, and I'll check again in three months.

Want to know if the switch is worth it?

Send me your latest statement and I'll tell you what you're paying against what your bank gives new customers and what the rest of the panel is doing, put the reprice request in, and only talk refinance if the answer isn't good enough. Before anything goes near an application.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

Common questions about refinancing with a broker

Do I need a broker to refinance, or can I do it myself?+

You can do it yourself, and the first step, ringing your current bank for a discount, is one I'd encourage anyone to make on their own. What a broker adds is the panel: seeing every lender's valuation approach, buffer, reduced-buffer gates and cash-out rules at once, and knowing which one will actually take you before an application goes in. The bank pays me when a loan settles, so it doesn't cost you anything either way.

How much does it cost to refinance a home loan?+

I budget $1,000 to $1,200 per property for discharge, government and new lender fees, and the new lender often waives part of that. The two costs that can blow that number out are break costs if you're leaving a fixed rate, which you get in writing first, and lenders mortgage insurance if your loan is over 80% of the property's value, because LMI doesn't transfer between lenders.

Why would a bank refuse to refinance me if I've never missed a repayment?+

Because a refinance is a full assessment of income, debts and living costs all over again, with a buffer on top of the interest rate, generally 3%, to prove you could still pay if rates went up. Paying on time doesn't enter that test. The fix is the reduced-buffer refinance paths a lot of lenders now run at 1%, which generally need a clean 12 month history, no increase in the loan, and a loan under 80% of the property's value.

How long does refinancing take?+

From application to settlement, four to six weeks is typical, and the new lender does most of the heavy lifting once your documents are in. If your fixed rate is ending, the whole thing can be approved in advance and timed to settle the day after expiry, so you never spend a day on the revert rate and never pay break costs for leaving early.

Next question

Repricing versus refinancing: which one should I do first?

Move one, in full. The free step most people skip on the way to paying for the expensive one.