- Refinancing fees depend on individual lenders.
- Some of the common fees refinancers may have to pay include application fee, valuation fee, discharge fee, settlement fee, and mortgage registration fee.
- Refinancers currently on a fixed-rate home loan will likely have to pay a break fee for early termination of the loan.
There are hundreds of reasons Australian property owners may consider refinancing their home loans. But one of the big ones is switching to a lower interest rate. A half of a percentage point could save a borrower thousands of dollars in interest every year, and potentially hundreds of thousands over the life of their loan.
You can get some idea of how much you could save in interest using Savings.com.au's Refinance Home Loan Calculator.
Costs of refinancing a home loan
There are many fees that lenders and banks can tack onto the home loan refinancing process. This will depend on individual lenders but be sure to read the fine print. Some may waive application fees but charge higher ongoing fees, for instance.
- Quick tip: Pay attention to the comparison rate to factor in fees and charges when choosing a new loan. A loan with high fees is likely to have a comparison rate that's significantly higher than the advertised rate.
Here’s a quick look at fees you may have to pay when you refinance your mortgage:
Fee | Purpose | Amount |
Application fee | For processing the new loan | Up to $750 (some may waive the fee) |
Property valuation fee | For assessing the current market value of your property | ~$300-$600 (some may waive the fee) |
Discharge fee | To cover the admin cost of releasing your mortgage | ~$200-$400 (some may charge higher) |
Break cost (if fixed) | To protect the lender from loss caused by early termination of a fixed-rate loan | Varies |
Settlement fee | To cover legal and admin cost to settle the new loan | ~$100-$500 |
Mortgage registration fee | To register the lender’s legal interest in your property | ~$160-$230 |
Exit fee (for loans taken out before 1 July 2011) | To cover admin costs for closing a loan early | Varies |
These are indicative costs, and typically vary by lender.
When contemplating the cost of refinancing, it's important to calculate the cumulative expense rather than comparing individual fees charged by different lenders. Some of the typical upfront refinancing fees you might come across are explained below.
1. Mortgage application fee
If you're looking to refinance externally (that is, with a different lender) you may need to pay an application fee, also known as an establishment or upfront fee. This is a one-off payment to set up the new home loan and will cover the administration costs incurred by the lender.
Sometimes, a lender will include any costs associated with valuing a borrower's property in their application fee.
2. Property valuation fee
Depending on how much equity you have in your property, a new lender may ask to value your asset before giving you the tick of approval to refinance. Valuation fees vary between lenders, properties, and locations.
Valuations can cost as little as $50 or more than $1,000, but they generally sit somewhere between $300 and $600. Meanwhile, there are plenty of lenders that don't charge a valuation fee or simply tie it into their wider application fee.
3. Discharge fee
A mortgage discharge fee, also known as a termination fee, is generally applicable to an external refinance and charged by your existing lender. Your lender may require you to pay a discharge fee to cover the administrative costs it incurs when ending a loan contract.
While some discharge fees can top $1,000 or more, they typically sit at around $200 to $400.
4. Break cost
If you currently have a fixed-rate home loan and you want to refinance before the end of your fixed term period, you'll probably have to pay a break fee. These cover any potential losses your current lender might face due to your agreement ending before time.
Why do lenders charge break fees for fixed-rate home loans?
But what losses does a lender bear? Again, this will depend on the individual lender and also what's going on with interest rates on the wider market. You might assume that when you take out a fixed-rate home loan, your bank simply uses the money from the deposit accounts of its savers to hand over to you. But that's not always the case.
Generally, a bank or lender will borrow the money they lend you from the wholesale money market where the interest rates will be lower than the rate they charge you. If you pull out of your fixed-rate agreement early, the bank or lender will still have to pay interest on the money it initially borrowed on your behalf. Therein lies the reason for break costs.
How do lenders calculate break costs?
Break costs can be somewhat complicated to calculate as they depend on how much a bank or lender is out of pocket. They generally differ based on the loan amount, the fixed rate compared to the current variable market rate, and the length of time remaining on the fixed term. Every lender will have its own calculation method.
In some cases, it can cost thousands of dollars to break a mortgage (Savings.com.au even reported on a $35,000 break fee in 2020), so it's probably worth contacting your lender to work out how much you might be up for if you were to refinance.
5. Settlement fee
Settlement fees are paid to a lender to settle a new loan. They cover the costs of a lender's legal representation who will conduct the loan settlement with you and your conveyancer or solicitor.
The cost to settle is commonly between $100 and $500 but can be as much as $800 or more. If you take out a professional package as part of your new loan with an annual fee, the settlement fee is often waived.
6. Mortgage registration fees
A mortgage registration fee is charged by state and territory governments for mortgages to be added to a register, effectively preventing you from selling the property without paying back the lender. Registration fees vary between states and territories, ranging from $160 to $230.
7. Exit fees
Following government reforms, lenders have been banned from charging early exit fees on loans taken out after 1 July 2011. However, loans taken out before this date may still incur exit fees, which can be up to $7,000. You'll need to check the terms of your existing loan to find out if an exit fee applies to you.
8. Time and effort
Time is money, and it takes time to compare home loans and fully assess the terms and conditions between different products. Refinancing can take anywhere from a few days to multiple weeks, depending on multiple factors.
Whether you believe it's worthwhile spending your time researching, filling out paperwork, organising appointments, and waiting for valuations depends entirely on you.
Considering refinancing your home loan? The table below can get you started on some of the lowest interest rate home loans currently available on the market.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
What the expert says
The most important thing to consider before refinancing is the cost involved, which is often overlooked by people chasing a better rate.
Typically, it costs around $1,000 to refinance a loan, due to discharge fees from current lender; mortgage de-registration and registration fees from the state government; annual fees, settlement fees or application fees from the new lender.
The second thing is the size of the rate difference, which saves $1 per 0.1% per $1,000 of loan. To illustrate, a rate reduction of 0.1% is equivalent to $500 savings per year on a $500,000 home loan. A 0.2% rate reduction would be $1,000/year in savings.
We will never recommend refinancing if it will take longer than one year to make back the costs of refinancing.
Should you refinance internally or externally?
There are two types of refinancing options:
- External refinance – When you move your loan to another lender
- Internal refinance – When you refinance your home loan with your existing lender
A homeowner looking to refinance through their existing lender (internal refinance) might be able to bypass some of the fees associated with refinancing, such as exit fees, valuation fees, and application fees.
However, switching to another lender (external refinance) may allow you to access rates lower compared to your current lender. Per the Australian Bureau of Statistics (ABS) lending data, there generally are more external refinances than internal refinances.
But this doesn’t mean you should head straight out of the door of our current lender. Many lenders are looking to keep borrowers' loans on their books and might waive some fees, offer discounted interest rates, or other enticements in competitive markets.
So talk to your lender first before you look elsewhere. Ask if they can offer lower interest rates or better loan terms and conditions. It can also pay to be on the lookout for home loan offers and cashback deals available on the wider market.
Refinancing in Australia
According to the ABS, refinanced home loans totalled more than $390 billion in value (seasonally adjusted) over the 12 months to December 2025. Of the total, $258 billion were refinanced externally, while the remaining $132 billion was internal.
A few reminders before refinancing your home loan
Before you jump into a refinance, it pays to slow down and check a few key details.
Review your current rate and fees
Take a look at your current mortgage. Compare your interest rate to what’s currently on offer and note any ongoing fees, package charges, or sneaky add-ons.
Check whether the long-term savings from a lower interest rate on a home loan you’re refinancing to outweigh the upfront costs and ongoing expenses involved in switching. This helps you judge whether refinancing will genuinely save you money, or just swap one set of fees for another.
Understand any break costs
If you’re on a fixed rate, breaking your loan early can trigger break costs. These can vary massively depending on your lender, your fixed term, and wholesale rate movements.
Break costs can set you back a couple thousand dollars. Therefore, knowing this number upfront ensures you don’t get blindsided by a cost that cancels out your potential savings.
Check your credit score
When you refinance, lenders reassess you as if you’re applying for a brand-new loan, so your credit score matters. A healthier score can unlock sharper rates and smoother approval. If your score’s slipped, it might be worth improving it before refinancing.
Read more: How does your credit score affect getting a home loan?
Estimate your property value
Your loan‑to‑value ratio (LVR) determines both your eligibility and the deals you’re offered. Getting an updated estimate of your property’s value helps you understand your equity position, and whether you might trigger LMI by moving lenders.
- Take note: LMI may become payable if you’re pushed above 80% LVR (your equity is below 20%).
Clarify what you really want
Refinancing isn’t just about chasing a lower number. Are you aiming for smaller repayments? More flexible loan features like an offset account or redraw? Or are you switching to better align your loan with your long‑term plans?
Being clear on your goals helps you choose the right loan, not just the cheapest‑looking one. Consider talking to a financial advisor to better understand what suits your current situation.
Read more: How to refinance your home loan
Savings.com.au's two cents
Contemplating the list of refinancing costs may be daunting, but it's worth measuring against the potential long-term savings generated by refinancing your home loan to a lower interest rate or better loan terms and conditions.
How much a borrower might save will depend on the size of their mortgage, how many years are left on their loan term, and how much lower their new interest rate is, among other factors.
Therefore, ensure you are thorough in working out which refinancing costs apply to you, asking both your existing lender and your potential new lender what they will charge you. Before you jump to a new loan, it's worth doing a full cost-benefit analysis to determine whether it will be worth your while.