How much does it cost to refinance a home loan?
Refinancing a variable rate home loan in Australia typically costs $500 to $1,500 in discharge, registration and valuation fees. Leaving a fixed rate early adds a break cost that can run from nothing to tens of thousands. Here is every line item, a worked example, and the costs you can avoid.
- Variable rate loan: usually $500 to $1,500 all in, often covered by a lender cashback
- Fixed rate loan: the same fees plus a break cost, which you should have quoted in writing before deciding
- Above 80% LVR you pay Lenders Mortgage Insurance again; it does not transfer between lenders
- Exit penalties were banned on loans written after 1 July 2011; a discharge fee of $150 to $400 is what remains
- On a $500,000 loan, a 0.5% rate cut saves about $2,500 a year, so most variable refinances pay back within months
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are based on a secured loan of $30,000 over 5 years for vehicle finance and $50,000 over 5 years for equipment finance, as required under the National Credit Code.
What does it cost to refinance a home loan?
The fees fall into three groups: what your current lender charges to let you go, what the state charges to move the mortgage on the title, and what the new lender charges to set you up. The ranges below are typical for 2026; your lender's fee schedule and your state's land registry have the exact figures.
| Cost | Typical range | Notes |
|---|---|---|
| Discharge fee (current lender) | $150 to $400 | Charged by your existing lender to close the loan. Exit fees beyond this were banned on loans written after 1 July 2011. |
| Mortgage discharge registration | $120 to $230 | State land registry fee to remove the old mortgage from the title. Varies by state. |
| New mortgage registration | $120 to $230 | State land registry fee to register the new lender’s mortgage. Varies by state. |
| Application or establishment fee (new lender) | $0 to $600 | Often waived for refinancers, and frequently offset by a cashback offer. |
| Valuation fee | $0 to $600 | Many lenders now use a free desktop valuation for standard properties. A full valuation is more likely for unusual properties or high LVRs. |
| Settlement or legal fee | $0 to $400 | The new lender’s cost to process settlement. Some waive it. |
| Lenders Mortgage Insurance | $0, or thousands | Payable again if your new loan is above 80% LVR. LMI does not transfer between lenders. |
| Fixed rate break cost | $0 to tens of thousands | Only if you leave a fixed rate early. See the break cost section below. |
How much does it cost to refinance a $300,000 mortgage?
Take a $300,000 variable rate loan with 20% or more equity, moving to a lender that offers a desktop valuation and waives its establishment fee. The bill is roughly: discharge fee $350, discharge registration $170, new mortgage registration $170, valuation $0, settlement fee $0 to $300. Total: about $700 to $1,000.
Against that, a 0.5% rate reduction on $300,000 saves about $1,500 a year, so the switch pays for itself inside eight months. If the new lender is also paying a $2,000 cashback, you are ahead from day one. The same loan on a fixed rate with two years to run could add a break cost of several thousand dollars, which changes the answer entirely.
What are break costs and how are they calculated?
When you fix a rate, the lender locks in its own funding at that rate for the term. If you leave early and rates have fallen since you fixed, the lender loses the difference for the rest of the term, and the break cost is that loss passed on to you. If rates have risen since you fixed, the break cost is usually small or nil.
The simplified calculation is: loan balance, multiplied by the difference between your fixed rate and the lender's current rate for the remaining term, multiplied by the years remaining. On a $500,000 loan fixed at 5.5% with two years left, where the lender's equivalent rate is now 4.5%, the estimate is $500,000 × 1% × 2 years, or about $10,000. Lenders use their wholesale funding rate rather than an advertised rate, so the real figure differs, but the shape is the same: a big rate fall plus a long remaining term equals a big break cost.
Your lender must give you a break cost quote on request and it costs nothing to ask. The quote is only valid for a few days because it moves with market rates, so get it when you are ready to decide, not months ahead.
Which refinancing costs can you avoid?
- Wait for the fixed term to end. The break cost is zero on the day the fixed rate expires. Start the refinance six to eight weeks before that date so settlement lands just after it.
- Stay at or under 80% LVR. That avoids a second LMI premium, which is the largest avoidable cost in most refinances.
- Take a cashback. Where the rate is competitive, a $2,000 to $4,000 cashback covers the fees several times over.
- Ask for fee waivers. Establishment, valuation and settlement fees are routinely waived for refinancers. A broker will ask for you; you can also ask directly.
- Ask your current lender to reprice first. A repricing has no discharge or registration fees at all. Get a competitor's written offer, then ask your bank to match it.
How do you work out whether refinancing pays?
Add up the costs above, including any break cost quote. Then work out the annual interest saving: loan balance multiplied by the rate difference. Divide the first by the second and you have the number of years to break even. Under one year is a clear yes on a variable loan; two to three years is a maybe that depends on how long you plan to keep the loan; longer than that usually means the rate difference is too small to bother. The refinance calculator does this arithmetic for you.
Keep reading
The rest of the refinancing guide.
Refinancing cost FAQs
How much does it cost to refinance a $300,000 mortgage?
Do you have to pay LMI again when refinancing?
Are there exit fees on home loans in Australia?
Is it worth refinancing for 0.5%?
Can refinancing costs be added to the loan?
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