When’s the best time to refinance?

The best time to refinance depends on your personal needs and goals. Common reasons include coming off a fixed rate, securing a better rate due to improved credit or equity, consolidating debt, or needing funds for major expenses.

How soon can you refinance a home loan?

There are generally no restrictions on how soon you can refinance, but doing it too early may raise red flags with lenders and impact your credit score. It’s best to get your finances in order at least six months beforehand.

When refinancing may not be worth it?

Refinancing may not be worth it if your LVR is over 80%, fees are high, you're on a fixed rate with break costs, you're close to paying off your mortgage, or your financial situation has worsened.

What if the interest rate on the refinance home loan is only marginally lower?

If the rate is only slightly lower, refinancing might not save you much. Factor in fees like application, valuation and package fees, and calculate how long it will take to break even on the costs.

When Can You Refinance A Home Loan? (2025 Expert Guide)

Q: When can you refinance a home loan?

You can refinance your home loan whenever you like, but it’s usually best to wait at least two years after your original loan has settled. Refinancing comes with costs, so you’ll want to be sure you’re getting a much better deal.

Q: How often can you refinance?

You can refinance as often as you like, but it's best to review your loan annually and consider refinancing every 2–3 years. Make sure the savings outweigh the time and effort involved.

Q: Is six months too soon to refinance?

You can refinance in as little as six months, but it depends on your circumstances, fees, and whether your rate and equity position justify the switch.

Q: How long does it take to refinance with a new lender?

Refinancing with a new lender typically takes 4 to 6 weeks, including application, valuation, review and approval. Some 'rapid' refinance loans can settle in as little as 72 hours.

Q: How long does it take to refinance with the same lender?

Refinancing with the same lender usually takes 2 to 4 weeks. The process is quicker since the lender already has your financial and property information.

Q: Is it quicker to refinance with the big four banks?

Refinancing with the big four banks can be quicker if you're already a customer. However, processing times vary based on your application and the bank's internal processes. Smaller lenders may also offer faster turnaround times.

The time to refinance is when you can find a better home loan deal, when your current loan structure no longer fits your needs or when you're in a position to borrow more by releasing equity in your property. Here are some common situations where refinancing can make sense:

Interest rates have dropped below your current rate

Interest rates have fallen well below your current variable rate, meaning you could potentially secure a lower rate and reduce your monthly repayments. Just make sure the savings outweigh any switching costs.

You’re approaching a fixed rate cliff

When your fixed-rate term ends, your loan typically reverts to your lender’s standard variable rate, which is often much higher than the most competitive rates available on the market. Instead of copping the sudden jump in repayments, you could refinance to a better deal.

You want to lock in a fixed rate

If interest rates are at a low point in the cycle and tipped to increase, you might consider switching to a fixed rate home loan. Locking in can help you secure a lower rate and shield yourself from future repayment hikes.

You’ve built up equity in your home

Rising property values and consistently making your mortgage repayments will improve your loan-to-value ratio (LVR). This stronger position may help you qualify for a lower interest rate or better loan features when refinancing.

You want to consolidate high-interest debt

Rolling personal loans or credit card debt into your mortgage can simplify your finances and reduce interest costs. Rather than paying repayments on multiple high-interest debts, consolidating makes it easier to manage with a single monthly repayment, often at a lower interest rate.

You need funds for major expenses

A cash-out refinance lets you tap into your home equity to access funds for big costs like renovations, education, or even a deposit for an investment property. It can be a cost-effective way to borrow, provided the new loan amount and repayments still align with your budget.

Your credit score has improved

An improved credit score may help open doors to better loan options and lower interest rates. Refinancing lets you move from bad credit lenders to more competitive products, potentially saving you money and giving you access to features, like redraw or offset.

You’re going through a divorce or separation

Refinancing may be necessary to remove a partner from the loan or buy out their share of the property. It can also help restructure the loan to reflect your new financial situation and responsibilities.

Another reason to refinance may be that you’re not happy with your current lender and the level of service you’ve received. Having access to a banking app with everything you need at your fingertips – or the ability to speak with a real person – can make a big difference.

While there are several advantages to refinancing your home loan, there are times when it may be better to wait. Consider these factors before diving in:

Your LVR is greater than 80%

If you’re borrowing more than 80% of your property’s value, you’ll likely need to pay for lender’s mortgage insurance (LMI), even if you’ve already paid it on your current mortgage. There’s also a strong likelihood lenders won’t offer you their best rates if your loan-to-value ratio (LVR) is above 80%.

There are high fees attached

The cost of refinancing could mean that the benefits don’t outweigh the fees. Potential costs can include valuation fees ($50-$600), new loan set-up fees (up to $750) and exit fees ($350-$500). A mortgage broker may be able to help you negotiate lower costs or have some fees waived altogether.

You’re on a fixed rate

There will be higher break costs compared to a variable rate loan. However, if your fixed rate is particularly high relative to the best home loan rates available, it might still be worth it. It may pay to speak to a mortgage broker in this instance.

You’re close to paying off your mortgage

If you’re near the end of your loan and only have a small balance left – say, $100,000 – it may not be worth refinancing. That’s because the potential savings might be small compared to the costs involved. Some lenders may also be less willing to refinance small loan amounts. In this case, it might be better to ask your current lender for a lower rate instead.

If your circumstances have shifted in a way that could make loan approval harder, refinancing might not be the right move – at least for now. This could include recently taking on new debt, like a car loan, or experiencing a drop in income. Lenders may view you as a higher risk, which could limit your options, result in less competitive rates, or in some cases, lead to outright rejection.

How often can you refinance?

You can refinance as often as you like, but it’s generally best to review your home loan once a year and consider refinancing every 2-3 years. Since refinancing involves paperwork and approval time, you’ll want to make sure the potential savings or benefits outweigh the costs and effort of kickstarting the process.

Refinancing too frequently can raise red flags with some lenders, as it could indicate financial problems or other concerns. After all, it’s in their best interest to keep you as a customer, so a track record of switching within six or 12 months might work against you when applying for a new home loan.

Your reasons for switching mortgages should be crystal-clear because it can also impact your credit score temporarily. You’ll need to keep this in mind if you’re planning to make other financial applications soon, like a credit card or personal loan.

Mansour Soltani, Money.com.au’s Home Loans Expert

“It’s best to get your finances in order at least six months before refinancing. This means having no missed payments on bills, credit cards, loans or extravagant spending. Lenders will also look at how you manage your money, including any frequent or unusual cash withdrawals, to assess if you can service the new loan. They also tend to favour borrowers taking out larger loans – typically $800,000 or more – so you may be offered better rates and terms if you're in that category.”

Mansour Soltani, Money.com.au’s Home Loans Expert

A recent Money.com.au survey found that one in three Australians (33%) would only consider refinancing if interest rates dropped by at least 1.00%. Another 23% said a 0.50% drop would be enough, while 22% would act at a 0.75% reduction. Just 10% would consider switching for a 0.25% cut, and 8% weren’t sure.

A couple looking at mortgage documents on their kitchen table as they consider to refinance

When is refinancing worth it?

We explore whether refinancing a home loan is worth it if the interest rate is only marginally lower.

You might need to refinance to a much lower interest rate for it to make a real difference. This is because the savings you get from a lower rate can be eaten away by the fees involved in refinancing.

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FAQs about when to refinance

How long do you have to wait to refinance a mortgage?

While there’s no strict rule, it’s generally best to wait at least two years before refinancing your home loan. This gives you time to build equity and recover from any upfront costs associated with your original loan.

However, there are exceptions – such as when interest rates drop significantly or your property increases sharply in value, improving your loan-to-value ratio (LVR). In these cases, refinancing sooner may make financial sense.

Is six months too soon to refinance?

You can refinance your loan in as little as six months, but whether it makes sense depends on your situation, the current mortgage market, and any switching fees involved. You should also check if interest rates have dropped since you first took out your loan and if you’ve built up enough equity in your home.

How long does it take to refinance with a new lender?

Refinancing with a new lender usually takes about four to six weeks. This includes the application process, property valuation, lender review, and final approval. The exact time can vary depending on the lender, the strength of your application, and how quickly you provide the necessary documents.

Some lenders offer “rapid” refinance home loans, which can be processed in as little as 72 hours if your application is prioritised. These loans are normally only available to customers who are refinancing from eligible loans from certain lenders.

How long does it take to refinance with the same lender?

Refinancing with the same lender typically takes less time than with a new lender, around two to four weeks. Since your current lender already has your financial information and property details, the process is often quicker. This timeline includes reviewing your application, updating your loan terms, and finalising the new agreement.

Is it quicker to refinance with the big four banks?

Refinancing with the big four banks - ANZ, CBA, NAB and Westpac - can be quicker if you already bank or have a mortgage with them. The big four have efficient systems and extensive resources, but processing times can vary depending on your application, how quickly you submit your documents, and the efficiency of the bank representative handling your loan.

Smaller lenders can sometimes process refinance home loans faster than the big four banks because they have more efficient procedures. However, the speed of refinancing can differ for each application, regardless of which lender you choose.

What can delay refinancing?

Some of the main factors that can delay refinancing, include:

Errors in your application

Missing or unsubmitted documents

Additional requirements requested by the lender (i.e. income verification details like tax returns if you’re a low-doc borrower)

Internal lender processes and the efficiency of the bank representative handling your loan

What’s the best time of year to refinance a home loan?

While there's no perfect season, many people review their finances at the start or end of the financial year. According to the latest ABS lending data, the most popular time for owner-occupiers and investors to refinance their home loan is during the months of May, June and July.

How do I know if the time is right to refinance?

It may be the right time if interest rates have dropped, your financial situation has improved, your property has grown in value, or your current loan no longer meets your needs. An annual home loan health check is a good habit to get into.

Should I refinance if I plan to sell my home soon?

Probably not. If you're planning to sell in the near future, the costs of refinancing may outweigh any short-term savings. It’s worth crunching the numbers or speaking with a broker first.

When is it too late to refinance a home loan?

It's rarely "too late" to refinance, but if you're close to paying off your loan or planning to sell soon, the savings may not justify the costs. The later you are in your loan term, the less impact a lower interest rate may have on your overall repayments.

Should I refinance before or after renovating?

If you're looking to increase your property’s value and improve your loan-to-value ratio (LVR), refinancing after renovating might open up better deals. But if you need funds for the renovation itself, a cash-out refinance before you renovate could be an option.

Can I refinance during maternity or extended leave?

You can, but timing is important. Lenders will assess your income and employment status, so refinancing during a period of reduced income or leave might affect your borrowing power. They’ll likely require a letter from your employer confirming your return date and salary.

When Can You Refinance A Home Loan?

When to refinance your home loan