Refinance

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Mortgage Broker to Refinance: When It Pays Off and How It Works

A broker can compare lenders, work out whether switching really saves money and handle the application. Here is when refinancing is worth it and what to watch for.

A mortgage broker to refinance your home loan compares lenders for you, works out whether switching saves money after costs and handles the application. Refinancing can lower your repayments, release equity or put you on a better loan, but only if the numbers work.

This guide explains when refinancing makes sense, what it costs, and how a broker helps. See our refinance loans page for the loans we arrange.

Why Use a Mortgage Broker to Refinance?

• Compare many lenders: your current bank can only offer its own products.
• Work out the real saving: a lower rate is not a saving if fees and costs wipe it out.
• Handle the paperwork: applications, valuations and discharge with your old lender.
• Negotiate: a competing offer can sometimes lead your current lender to improve its pricing.

Not sure how brokers work? Read what is a home loan broker.

When Is It Worth Refinancing?

• Your interest rate is higher than rates currently available
• Your fixed rate is about to end and you will roll onto a higher variable rate
• You want to access equity for renovations or an investment property
• You want to consolidate debts into one loan
• You need features such as an offset account or redraw
• Your circumstances have changed, for example your income or property value

Example: Does Refinancing Save Money?

This is an illustration only, using a $600,000 loan over 30 years with principal and interest repayments.

Illustrative only. Your rates, costs and savings will differ. Use our free calculators to test your own numbers.

What Does It Cost to Refinance?

• Discharge fee charged by your current lender
• Application or establishment fee charged by the new lender (some waive it)
• Valuation and settlement fees
• Break costs if you leave a fixed rate loan early, which can be significant
• Lenders mortgage insurance if the new loan is above 80% of the property value

A mortgage broker to refinance your loan adds these up and compares them with your saving, so you know whether it is worth it.

Watch Out for Cashback Offers

Some lenders offer cashback for refinancing. Cashback can help, but check the conditions: the interest rate may be higher than competing loans, and you may have to repay it if you leave within a set period. A mortgage broker to refinance can compare cashback deals for you. Compare the total cost over several years, not only the upfront cash.

How to Use a Mortgage Broker to Refinance: Step by Step

1. Review your current loan: rate, balance, fees, features and any fixed term.
2. Compare lenders: the broker shortlists loans that suit your goals.
3. Check the numbers: savings, costs and break-even point.
4. Apply: the broker prepares and lodges the application.
5. Approval and settlement: the new lender pays out your old loan and you start the new one.

For more detail on the stages, see our loan process page.

Do I Pay a Mortgage Broker to Refinance?

For most refinances the new lender pays the broker, so you usually pay no separate broker fee, though some brokers charge for complex work. Always ask in advance. We explain this in mortgage broker fees.

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Frequently Asked Questions

This article is general information only and is not financial or credit advice. Speak to a licensed broker about your situation.