If you’ve had your current home loan for a number of years, it’s likely your needs have changed, or that your loan may not have flexible features or add-ons that have since become available.

Should you decide to compare home loans and you find another loan that better suits your needs, you can refinance. Refinancing involves paying out your current loan with a new one. It may shorten your loan term and reduce your repayments, so you can afford to make extra mortgage repayments and own your home sooner.

Why refinance?

There are a number of reasons to consider refinance, such as:

  • To get a more suitable interest rate, or new features such as flexible repayments, redraw facilities or an offset account 
  • To access equity in your home to renovate, invest or travel
  • If you’re coming to the end of a fixed rate term, and you want a more suitable interest rate or a more flexible home loan
  • To consolidate debts such as a personal loan, car loan or credit card into your mortgage, so that it’s easier to manage your finances.

Some borrowers choose to refinance and change to a different loan type altogether. For instance, you might refinance from a variable rate with your current bank to a new lender with a competitive fixed rate loan. Or, you might refinance into a split loan, where part of your loan is fixed rate while the rest is variable.

Things to consider

When comparing home loans with a view to refinance, take into account any upfront and ongoing costs associated with exiting your current home loan and switching to the new loan. These may include a settlement fee, loan establishment fee, mortgage registration fee, loan service, and/or exit fees and charges.

You could refinance into a new loan that has a package fee attached, such as CommBank’s Wealth Package. These types of packages often give you the opportunity to save money and pay off your loan sooner, through interest rate discounts and flexible loan options that help you reduce interest including redraw, offsets and split rate home loans.

Generally, if you have less than 20% of the purchase price saved as a deposit, you may need to pay Lenders’ Mortgage Insurance or Low Deposit Premium as well.

It’s also worth researching whether the home loan you’re applying for offers any relief or concessions during times of hardship. For instance, CommBank offers complimentary protection for eligible Owner Occupied home loans through Home Loan Compassionate Care, while CommBank My Property lets you track and manage your home loan and property’s performance.

To help you compare CommBank home loans, you can view our standard home loan rates and fees.

For seamless refinancing, you may want to apply for FASTRefi®, which could be suitable for eligible home loans and lenders, or choose our standard refinance option; either way, our step-by-step refinance guide can make it easier for you.

Talk to a Home Lending Specialist about refinancing

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Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs. You should, before acting on this, consider the appropriateness to your circumstances.