Refinance Home Loan Comparison

A refinance home loan, also commonly known as a refi loan, is a type of loan available to people who already have a home loan on a property and want to switch to another mortgage product or another lender—or both. It’s generally similar to other types of home loans, and can be available to both owner-occupiers and investors and offered with a variable rate, fixed rate or a split loan made up of a combination of fixed and variable rates. It may also be possible to refinance other types of loans, such as personal loans and car loans (fees and charges generally apply).

You can refinance with your current lender by asking to change to a different type of loan or you can refinance with a different lender (or via a mortgage broker), which means going through that lender’s application process. If your application is successful, the new lender will typically arrange for the mortgage from the previous lender to be ‘discharged’ and transferred over. There could be fees and charges involved with refinancing, including discharge fees.

Whether or not it’s a good idea to refinance a mortgage depends on many factors, such as the conditions of your current mortgage, the other deals and home loan rates available on the market and whether or not you can qualify for a new loan. One possible outcome of refinancing a loan could be to reduce your costs. If that’s the case, switching may make sense. It’s important, however, to fully understand all of the financial implications of refinancing. This could include extra fees or a longer loan term (which could make your loan more expensive overall), so it’s a good idea to read all of the loan documentation carefully so you know what you’re signing up for. If you’re unsure, it might be wise to consider professional financial advice before making a decision.

It may never feel like the “perfect time” to refinance, however, a good place to start could be to consider your current loan and scout for a better deal. For example, depending on your circumstances, it might be a good time to refinance if you find a better interest rate. If you have a fixed-rate home loan, another time to refinance could be when your fixed loan term is about to end. Fixed rate loans typically revert to a variable rate at the end of the term, so it could be worth comparing your options.

There is typically no cap on how many times you can refinance your home loan. However, it’s important to consider the overall fees and charges associated with refinancing. Applying for credit may also have an impact on your credit score. You can check your credit score for free with Canstar or via the Canstar App.

When you refinance a home loan, your previous mortgage is typically discharged (closed). The balance owing on the loan is transferred to the new loan (which could be with a new lender). You then begin paying off that loan under the terms and conditions of the new loan. This could mean a different repayment amount or method of payment.

How fast you can refinance your home loan will vary depending on the lender, the loan and your personal circumstances. In some cases, refinancing can take as little as a couple of days. In other cases, it can take over a month.

Remember, there are a number of steps involved in refinancing. This includes doing your research, applying for a new loan and getting approval. You may be able to speed up the refinancing process by getting all your paperwork ready before speaking to a lender. This includes things like proof of income documents (payslips), your current home loan statements and statements of any other debts, like personal loans and credit cards you might have. The process may also be faster if you’re refinancing with the same lender as they will already be aware of your finances.

The term “interest rate” means the amount of money you will have to pay or will receive from a bank, when you use one of its financial products, expressed as a percentage (%). When someone borrows money from a financial institution, the lender will charge interest on that loan—an extra amount of money the customer has to pay on top of their principal loan repayments. It’s the main way banks and financial institutions make money from loans. Conversely, when someone deposits money with a bank, the bank will pay that customer a percentage of that money back in interest, depending on how long they keep those funds in that bank. It’s why people choose to put their money in a bank. Banks then use this deposited money to fund loans to other people, among other things.

A good interest rate could be considered as one that is competitive against similar offerings from other financial institutions. Before committing to a financial product, it’s a good idea to not only consider the interest rate, but also the comparison rate, features and other costs associated with the product. For example, checking the loan includes features you want or need, such as the ability to pay extra to shorten the life of the loan or the ability to withdraw extra funds.

You can use Canstar’s refinance home loan comparison table (at the top of this page) to compare interest rates from our Online Partners, or filter from Canstar’s entire database. Generally, the lower the interest rate, the cheaper the loan will be, but it’s important to compare refinance home loans based on more than the interest rate alone. You can use the comparison rate to get a better sense of the overall cost of a loan, as this rate also incorporates many of the home loan fees that may apply to the product. You may also want to pay attention to the Star Rating that Canstar has given to the products you are comparing. This rating factors in a wide range of variables, including the costs of the loan but also the features on offer from the lender. It’s designed to give borrowers an idea of which loans and lenders are offering Outstanding Value.