How Long Before You Can Refinance Your Home Loan?

Jaeneen Cunningham
5 minutes ago
4 min read

Refinance Home Loan — For many Australians, refinancing every few years helps ensure their loan keeps pace with the market, avoiding the “loyalty tax” that banks often place on long-term customers.

Refinancing your home loan can be a smart financial move, whether it’s to secure a lower interest rate, reduce monthly repayments, consolidate debt, or unlock equity for another investment. But one of the most common questions homeowners ask is: how long do you need to wait before you can refinance your home loan?

The answer isn’t always straightforward. It depends on your lender, your current loan structure, and your personal financial circumstances. Below, we’ll break down the key considerations you need to understand before refinancing, the potential costs involved, the time and effort required, and how to decide whether refinancing is the right step for you.

When Can You Refinance your Home Loan?

Technically, you can refinance at almost any time after your loan has settled. However, in practice, it often makes sense to wait at least six to twelve months before refinancing. Here’s why:

Early repayment penalties – If you’re on a fixed-rate home loan, your lender may charge a break cost if you refinance before the fixed term ends. These fees can be significant, sometimes in the thousands of dollars, and may outweigh the benefits of refinancing early.
Lender requirements – Some lenders want to see a consistent repayment history before approving a refinance. A period of on-time repayments helps demonstrate your reliability as a borrower.
Property valuation stability – If you purchased recently, your property may not yet have been revalued by the market. Waiting a year or two can give your property time to appreciate in value, potentially improving your loan-to-value ratio (LVR) and allowing access to better interest rates.

Key Things to Consider Before Refinancing

Refinancing is not just about chasing a lower rate. There are several factors you’ll want to weigh up:

1. Your Goals

Ask yourself: Why am I refinancing? Common goals include:

Reducing your interest rate and repayments
Switching from variable to fixed, or vice versa
Consolidating multiple debts into one manageable repayment
Accessing equity for renovations, investments, or other purposes
Moving to a lender with better features or service

Knowing your goal will help determine if refinancing is worthwhile.

2. The True Cost of Refinancing

While the prospect of saving money is appealing, refinancing is not cost-free. Potential expenses include:

Discharge fees from your current lender (often $200–$400)
Break costs on fixed loans (can be thousands, depending on market rates and loan size)
Application fees with the new lender (typically $200–$600, though many lenders waive these)
Valuation fees (around $300–$500, sometimes covered by the lender)
Mortgage registration fees charged by state governments (usually under $200)

These costs can add up, so you need to weigh them against the potential savings from a lower rate.

3. Your Current Equity and LVR

Lenders typically want to see at least 20% equity in your property to offer their best rates. If your equity is less, you may be charged Lenders Mortgage Insurance (LMI) again when you refinance, which can run into the thousands.

4. Your Credit Profile

A strong repayment history, steady income, and a healthy credit score improve your chances of refinancing successfully. If your circumstances have changed since you first applied—for example, reduced work hours, new debts, or a change in employment—it could affect your eligibility.

5. Loan Features

It’s worth considering whether your new loan will offer features that suit your lifestyle and financial goals. For example, offset accounts, redraw facilities, extra repayment flexibility, or the ability to split between fixed and variable.

The Effort and Time Involved

Refinancing does take some effort, but with the right help, it’s a smooth process. Here’s what you can expect:

Initial Review (1–2 hours) – Collect your current loan details, recent statements, and think about your goals.
Loan Comparison (A few days) – Your broker or lender will compare loan products across the market. This is where professional advice is invaluable, as brokers can access a wide range of lenders and do the heavy lifting for you.
Application Process (1–2 weeks) – You’ll need to supply financial documents such as payslips, bank statements, and identification. The lender will also order a property valuation.
Approval and Settlement (2–4 weeks) – Once approved, your new lender will arrange to pay out your old loan and establish the new one.

All up, the refinancing process typically takes 4–6 weeks from start to finish.

Risks and Drawbacks to Watch Out For

Refinancing isn’t always the right move. Some risks include:

Resetting the loan term – If you refinance into a new 30-year loan, you may reduce monthly repayments but end up paying more interest over the long run.
Unnecessary costs – If you plan to sell or move soon, the costs of refinancing may outweigh the benefits.
Over-borrowing – Accessing equity can be tempting, but taking on too much extra debt can create financial strain.

The Benefits of Refinancing Done Right

When carefully considered, refinancing can deliver real benefits:

Lower repayments and interest savings
Access to more flexible loan features
Ability to consolidate and simplify finances
Opportunity to unlock equity for wealth-building or lifestyle needs
Improved service and support from a new lender

For many Australians, refinancing every few years helps ensure their loan keeps pace with the market, avoiding the “loyalty tax” that banks often place on long-term customers.

Why Use Etairos Finance to Refinance?

While it’s possible to research and refinance on your own, having expert guidance makes the process smoother and more effective. That’s where Etairos Finance comes in:

We take the time to understand your personal and financial goals.
We compare a wide range of lenders, not just the big banks, to find the loan that truly suits you.
We crunch the numbers on costs versus savings, so you can see clearly if refinancing is worthwhile.
We manage the paperwork, applications, and negotiations, saving you time and stress.
We provide ongoing support, reviewing your loan regularly to ensure it stays competitive.

If you’re wondering whether now is the right time to refinance, or if you simply want to check if you could be getting a better deal, reach out today. We’ll guide you through every step and help you make a confident decision for your financial future.