Should I Refinance? The Honest Checklist

The honest answer to "should I refinance?" is: sometimes. Roughly half the people who ask me should explore it, and the other half are better off staying put or waiting. Here's the checklist I actually run - both directions.

Signs refinancing is worth exploring

Your rate is noticeably above what's being offered to new borrowers. As a rule of thumb, a gap of around 0.30–0.50% or more starts to justify the effort - here's what different gaps are worth in dollars.
You haven't looked at your loan in two or more years. Loans drift. No news from your lender is rarely good news for your rate.
Your fixed rate is ending within about three months. Left alone, you'll roll onto the "revert rate", which is rarely kind - the 90-day playbook covers exactly what to do.
Your equity has grown past the 20% mark. Dropping below 80% loan-to-value unlocks better pricing and removes the LMI barrier - property growth or steady repayments may have done this without you noticing.
Your income has improved or your finances have simplified since the original application. You may now qualify with lenders who previously said no.
You want features your current loan lacks - a genuine offset account is the usual one, and for some households it beats a small rate cut.
You're consolidating expensive debts - done honestly, with eyes open about the long-term cost of stretching short debts over a mortgage term. That deserves its own conversation.
You want to put equity to work - a renovation, an investment deposit. See equity release, explained without the fog.

Signs it's not your moment

Your balance is small or your remaining term is short. The lifetime saving shrinks fast; switching costs don't.
Your loan is above 80% of your home's value. A new lender will likely want a fresh LMI premium - usually a deal-killer. Wait for equity to build.
You're mid-fixed-term with a big break cost. Get the payout figure first; it often ends the conversation until the term matures.
You might sell within a year or so. You'd pay the switching costs and hand the savings back at settlement.
Your income has become harder to evidence - new job probation, a fresh ABN, a rough year in the business. Sometimes the right move is to wait and prepare (self-employed? this one's for you).
You refinanced very recently and are tempted by another cashback. Serial switching bruises your credit file and rarely beats holding one genuinely sharp loan.

The one free move almost everyone skips

Before any application: call your current lender and ask for a reprice. Tell them you're reviewing your loan. It costs nothing, takes minutes, and often captures a decent slice of the gap - no paperwork, no credit enquiry. If they won't move (or won't move enough), you've lost nothing and you now know the market is your next stop. When I review a loan, this is step one, and it's also how I check I'm not putting you through a refinance you didn't need.

The honest answer

Refinancing is a tool, not a goal. The point of running this checklist isn't to switch - it's to know. Some of the most useful conversations I have end with "your loan's actually fine, see you next year." If you'd like the checklist run properly against your numbers and 40+ lenders, that's a 15-minute chat and there's no fee to you either way.

Quick answers

How often should I review my home loan?

Once a year is the habit that pays - plus a review about three months before any fixed term ends. Set a phone reminder. Most people who feel ripped off by their rate simply haven't looked at it since settlement.

Does refinancing hurt my credit score?

A refinance application creates a credit enquiry, which can nudge your score down slightly and briefly. One considered refinance every few years is normal and healthy; a scattergun of applications in a short period is what lenders read poorly. Compare first, then apply once, to the right lender.

Can I refinance if my situation has changed since my original loan?

It depends on the direction of the change. Higher income or a lower loan-to-value ratio usually improves your options. If income has fallen or your circumstances are more complex than before, requalifying can be harder - but different lenders assess this very differently, which is exactly where comparing 40+ of them earns its keep.

Prefer to just get a straight answer? Start your obligation-free enquiry → or call Michael on 0477 979 377.

Want the checklist run on your actual loan?

Fifteen minutes, your three key numbers, an honest answer - including "stay put" if that's the right one.

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