Three cash rate rises in 2026 have taken the RBA cash rate to 4.35% — and if your home loan has quietly drifted upward with each one, you're far from alone. Lenders reserve their sharpest rates for new customers, while existing borrowers pay what's known in the industry as the loyalty tax: the gap between your rate and the rate your own bank offers someone walking in the door today.
This guide covers when refinancing makes sense, what it really costs, and how the process works — including the situations where the right answer is to stay put.
Why 2026 is a review-your-loan year
In a rising-rate environment, the spread between lenders widens. Some lenders pass on every increase in full and add a margin; others compete hard for refinancers with sharper pricing and cashback offers. That divergence is exactly when a review pays off. Even a 0.4% rate difference on a $600,000 loan is roughly $2,400 a year — every year.
Rule of thumb: if you haven't reviewed your loan in the last two years, the odds you're still on a competitive rate are low. A review costs nothing; staying on autopilot usually does.
Six signs it's time to refinance
- Your rate ends in a mystery. You don't actually know your current rate — a classic sign it hasn't been reviewed since settlement.
- Your fixed term is ending. Loans revert to standard variable rates that are rarely competitive. Plan 2–3 months before expiry.
- Your equity has grown. If your property has appreciated and your loan-to-value ratio has dropped below 80%, you unlock better pricing tiers.
- Your circumstances improved. Higher income, closed credit cards, or a finished probation period can re-rate you with lenders.
- You want features you don't have. An offset account alone can save more than a rate cut for borrowers with healthy savings.
- You need to consolidate. Rolling a car loan or credit cards into the mortgage can slash total monthly repayments — used carefully.
What refinancing actually costs
Switching isn't free, and an honest assessment counts the costs:
| Cost | Typical range |
|---|---|
| Discharge fee (old lender) | $150 – $400 |
| Government registration fees (NSW) | $300 – $400 |
| New lender application/valuation | $0 – $600 (often waived) |
| Break costs (fixed loans only) | Varies — can be substantial; always check first |
Against that, many lenders offer refinance cashbacks. The maths usually favours switching when the rate saving exceeds the switching costs within 12–18 months. We run this break-even calculation for you before recommending any move — and if the numbers say stay, we say stay.
Accessing equity while you refinance
Refinancing is also the moment to put built-up equity to work — for renovations, an investment property deposit, or a construction project. Lenders will generally let you borrow up to 80% of your property's current value without LMI. If your home has grown from $600,000 to $750,000 since purchase, that appreciation may translate into usable funds without selling anything.
The refinance process (it's easier than you remember)
- Loan review. We benchmark your current rate, features and fees against the market — takes one conversation and a recent statement.
- Negotiate with your current lender first. Sometimes a discharge request prompts your bank to match the market. If they do, you win without moving.
- Application. If switching wins, we prepare one application for the recommended lender. Most refinances need payslips, statements and ID.
- Valuation and approval. The new lender values your property (often digitally) and approves, typically inside 1–2 weeks.
- Settlement. The lenders exchange payout figures between themselves. You sign, and repayments simply start with the new lender. No conveyancer needed.
Frequently asked questions
Does refinancing hurt my credit score?
A refinance application creates one credit enquiry, which has a small, temporary effect. Multiple applications in a short period is what damages a score — one reason to apply once, to the right lender, rather than shopping applications around.
Is it worth refinancing for a 0.25% rate difference?
Often, yes. On a $500,000 loan, 0.25% is about $1,250 a year. If switching costs are $700–$1,000, you're ahead within the first year. We run the exact break-even for your loan before recommending anything.
Can I refinance if my fixed rate hasn't expired?
Yes, but the lender may charge break costs, which can be significant. Sometimes paying the break cost still leaves you ahead; often it doesn't. Always get the break cost quote before deciding.
Will I need a deposit to refinance?
No. Your equity serves that role. As long as your loan is below roughly 80% of the property's current value, most lenders will refinance without LMI.
This guide is general information only and is current as at July 2026. It does not take into account your objectives, financial situation or needs, and is not credit advice or an offer of credit. Scheme rules, thresholds and price caps change — always confirm current details with Revenue NSW, Housing Australia, or speak with us before acting. Northstar Mortgage Advisory Pty Ltd, Credit Representative No. 579651, authorised under Australian Credit Licence 384324.