Refinancing your home loan in Perth: is it worth the cost and hassle
By Nathan Ellis · Updated 2026-07-08
Refinancing gets pitched constantly, but whether it’s actually worth it for you comes down to a fairly simple comparison: what you’ll save against what it costs to switch, and how long it takes to come out ahead. This is general information to help you frame that comparison, not a recommendation on your specific loan. Speaking with a refinancing specialist about your own numbers is the next step once you’ve worked through the basics.
The comparison that actually matters
It’s tempting to focus on the headline rate difference, but the number that matters is your break-even point: how long it takes for the savings from a lower rate to cover the costs of switching. If refinancing saves you a modest amount a month but costs a few thousand dollars to arrange, it can take a year or more before you’re genuinely ahead.
Costs that can eat into the savings
- Discharge fee from your current lender for closing the loan.
- Application and valuation fees with the new lender.
- Break costs, if you’re on a fixed rate and switching before the term ends. These can be substantial and are worth checking before you commit to anything.
- Lenders mortgage insurance, if your loan-to-value ratio has changed and you no longer meet the no-LMI threshold with the new lender.
Reasons people refinance beyond just the rate
Rate reduction is the most common driver, but it isn’t the only one. Some borrowers refinance to access equity for a renovation or another purchase, to switch from an interest-only period to principal and interest, to consolidate other debts into the mortgage at a lower rate, or to move to a lender with features they actually use, like an offset account. Each of these has its own cost-benefit calculation, separate from the headline interest rate.
A change in circumstances, like separating from a partner, can also trigger a refinance for reasons that have little to do with chasing a lower rate; see our guide on refinancing after separation or divorce if that’s your situation.
A rough framework for deciding
| Question | Why it matters |
|---|---|
| What’s your current rate versus the best available rate for your situation? | Sets the size of the potential saving |
| What are the total switching costs, including any break costs? | Determines your break-even point |
| How long do you plan to keep the loan or stay in the property? | If it’s shorter than your break-even point, refinancing may not pay off |
| Are you chasing a lower rate, a feature, or both? | Clarifies what you’re actually optimising for |
What the feedback pattern shows
Recurring praise in reviews of Perth brokers who handle refinancing points to two things: finding a genuinely cost-efficient option rather than just the first lower rate available, and keeping clients informed through what can otherwise feel like a slow process. That combination, a real cost comparison plus someone managing the admin, is generally what separates a refinance that’s worth doing from one that just feels like it should be.
When it’s usually not worth it
Refinancing tends to make less sense if you’re planning to sell or pay off the loan within a year or two, since you may not reach the break-even point before the loan ends anyway. It’s also worth pausing if the rate gap is small, since a saving of a few dollars a week rarely justifies the paperwork and fees involved. And if you’re on a fixed rate with a hefty break cost attached, it can be cheaper to wait until the fixed term ends than to switch early.
Getting a genuine comparison, not just a rate quote
A useful way to test whether refinancing is worth pursuing is to ask for the full break-even calculation in writing, not just a headline rate. A broker working across multiple lenders can run this comparison for a handful of options at once, rather than you contacting each lender individually and piecing the numbers together yourself.
This is general information, not financial advice on your specific loan. Your break-even point and the fees that apply depend on your current lender, your loan balance, and market rates at the time, so get a specific comparison before deciding whether to switch. Browse Perth mortgage brokers who handle refinancing, or read our scoring methodology to see how listings are ranked.
FAQ
- How much do I need to save to make refinancing worth it?
- There's no single number, since it depends on your switching costs and how long you plan to keep the loan. As a general guide, the savings need to clear your break-even point within a timeframe you're comfortable with, often one to two years.
- What costs are involved in refinancing?
- Possible costs include a discharge fee from your current lender, an application or valuation fee with the new one, and break costs if you're on a fixed rate. Not every refinance incurs every fee, so it's worth getting a specific list for your loan.
- Does refinancing hurt my credit file?
- Applying does involve a credit check, which can have a small, temporary impact. Comparing this against the ongoing cost of staying on an uncompetitive rate is usually the more relevant question.
- How long does refinancing take?
- It varies by lender, but a straightforward refinance often takes a few weeks from application to the new loan settling. Fixed rate loans or complex situations can take longer.