If you’re a homeowner in 2025 and haven’t reviewed your mortgage in the last 12–24 months, it may be time to consider refinancing. With interest rates on the move down, both thanks to RBA rate cuts and more generally due to the falling cost of money for the banks, many Australians are reassessing their home loans looking to save some money while also ensuring their loan still suits their needs and financial goals.
Whether you’re looking to reduce your monthly repayments, access equity, or gain more flexible loan features, mortgage refinancing can be a smart financial move—if done at the right time and with the right support.
In this guide, we’ll break down exactly what refinancing means, when it makes sense, and how the process works from start to finish.
What Is Mortgage Refinancing?
Refinancing simply means replacing your existing home loan with a new one—either with a different lender or renegotiated terms with your current lender.
Homeowners typically refinance to:
- Secure a lower interest rate
- Reduce monthly repayments
- Switch from a fixed to variable loan (or vice versa)
- Access equity for renovations, investments or big purchases
- Consolidate other debts (like credit cards or personal loans)
- Gain better loan features (e.g. offset account, redraw facility, flexible repayments)
When Does Refinancing Make Sense in 2025?
Refinancing isn’t always the right move, but here are some common signs it may be time:
1. Your Fixed Rate Is Expiring
Thousands of Australians are rolling off fixed rates set between 2020–2022 (as low as 2%). In 2025, many revert rates are sitting between 6.5% and 7.2%, which can cause significant repayment shock.
Further the rates that your bank offer you are most likely not the most attractive. Refinancing can help you secure a more competitive rate and avoid unnecessary interest.
2. You Can Get a Better Interest Rate
Even a small rate reduction—say 0.50%—on a $500,000 loan could save you around $2,500 per year.
If your current rate is above 6%, and your loan is more than 12 months old, there may be lower-rate options available.
3. You Want to Access Equity
If your home has increased in value, refinancing allows you to tap into your equity. Many clients use this to:
- Fund home renovations
- Invest in property or shares
- Pay for school fees or major expenses
- Consolidate credit card or other debt
4. You Want Different Features
A basic home loan may have suited you when you started out but now you may find that an offset home loan would suit your needs better (or vice versa) Similarly your needs may have changed with respect to other loan features. Repayment certainty may be important to you for a few years to fit your stage in life so you might want to look at fixing all or part of your loan.
Having a loan with the right features for your situation can make a big difference in paying down your loan faster and reducing the total interest you pay on the loan.
How Does the Refinancing Process Work?
Refinancing is typically quicker than applying for your first loan—especially with a broker guiding you through each step.
Step-by-Step Refinancing Process:
1. Review Your Current Loan
Start by understanding:
- Your current interest rate and repayment amount
- Remaining loan term
- Any fees (discharge, break costs)
- Features you use (e.g. offset, redraw)
???? Tip: A mortgage broker can do this for you with a loan health check.
2. Compare New Loan Options
Your broker will compare dozens of lenders based on:
- Interest rates
- Loan features
- Fees and eligibility
- Your personal goals
3. Choose the Right Lender
Once you select a better loan, your broker will handle the application, paperwork, and approval process.
4. Settlement and Loan Switch
Once approved, your new lender pays out your old loan, and your new loan begins. The entire process usually takes 2–4 weeks.
What Costs Are Involved in Refinancing?
While refinancing can lead to big savings, there are some costs to consider:
| Cost Type | Estimated Amount |
| Discharge Fee (from current lender) | $150–$400 |
| Application/Settlement Fee (new lender) | $0–$600 (often waived) |
| Government Mortgage Registration fees | ~$240 |
| Break Costs (if fixed loan is exited early) | Varies (check with your lender) |
???? Some lenders offer cashback rebates (up to $2,000+) to cover switching costs. Ask your broker which lenders are offering this in 2025.
Will Refinancing Affect My Credit Score?
When you apply for a new loan, the lender performs a credit check. This creates a temporary “hit” on your credit file. A one-off inquiry will not overly impact your credit rating. So as long as you meet repayments, refinancing won’t negatively impact your credit score long-term.
In fact, refinancing to reduce debt or improve cash flow can actually boost your creditworthiness over time as it better allows you manage/meet all your commitments.
Can I Refinance if My Property Value Has Changed?
Yes and an increase in property value may even help;
- If your Loan to Value Ratio (LVR) is under 80%, you’ll usually avoid LMI
- If your LVR is under 60% you’ll often get better rates then if you lending is higher
- If it’s over 80%, some lenders may still offer options—but you may need to pay LMI or accept a slightly higher rate
Property values in some areas have grown significantly since 2020, giving many homeowners more equity than they realise.
???? Ask Hatch for a property value estimate—we’ll help you determine your LVR before you refinance.
Should I Refinance With My Current Lender or Switch?
Staying With Your Current Lender
You can request a rate reduction or product switch—often called a “loan repricing”. This is something we do for our clients (and others) every day. This is the quickest option with minimal paperwork, but may not deliver the best savings in which case we talk to our clients about switching lenders.
Switching to a New Lender
Refinancing externally can give you:
- Lower rates
- Better features
- Access to equity
- Cashback offers
It takes a bit more effort—but a broker handles 95% of the process for you.
Final Thoughts: Is Refinancing Right for You in 2025?
With rising living costs and higher repayments, refinancing could help you:
- Cut your interest rate
- Lower your monthly repayments
- Pay off your loan faster
- Unlock equity to fund a range of plans
The key is to review your mortgage regularly and act when it no longer meets your needs.
Time for a Home Loan Health Check?
Book a free refinancing consultation with Hatch Financial Services today.
We’ll review your current loan, compare the best options, and help you make a smart, stress-free switch.
