Switch Lenders or Stay?
Refinancing to a new lender can secure a lower interest rate or better features, but staying with your current bank may save time and upfront discharge costs.
Should I refinance with a new lender?
Deciding whether to switch home loan lenders or stay depends on your current interest rate, loan features, and overall financial goals. While your existing lender might offer a quick rate reduction through internal repricing, moving to a new institution often unlocks sharper variable rates, lower comparison rates, or features like multiple offset accounts.
Before switching, calculate the total cost of moving versus the long-term interest savings. Exit or discharge fees, government registration charges, and potential new application fees apply when leaving a lender. However, if your equity has grown and your Loan-to-Value Ratio (LVR) is below 80%, a lower rate can easily offset these upfront expenses over time.
Keep in mind that changing lenders requires a fresh application and credit assessment. You will need to supply income documentation, undergo serviceability checks with current stress-test buffers, and pass a credit file review. If your financial situation has changed, staying put and negotiating internally might be the more straightforward option.
A Lonix broker can compare options across a wide panel of Australian lenders, help you calculate break-even timelines, and correctly structure your home loan to suit your needs.
Related questions
- How much does it cost to switch home loan lenders in Australia?
- Discharge and government registration fees typically total between $300 and $1,000, in addition to potential upfront application or valuation fees with the new lender.
- Can I negotiate a lower rate with my current lender?
- Yes, requesting a rate review or repricing from your current lender is often the fastest way to reduce monthly repayments without paying switching fees.
- Do I need an 80% LVR to refinance without LMI?
- Generally yes, maintaining a Loan-to-Value Ratio of 80% or lower ensures you avoid paying Lenders Mortgage Insurance when moving your home loan.
- How long does a home loan refinance take?
- Refinancing to a new lender usually takes two to four weeks from submission to settlement, depending on valuation and processing times.