The Reserve Bank of Australia raised the cash rate twice in early 2026 - first in February to 3.85%, then again in March to 4.10% - reversing the three cuts delivered during 2025. For homeowners who had just started benefiting from lower repayments, the shift has been unwelcome. But it has also prompted many to ask a sensible question: should I be reviewing my home loan? (Source: RBA Cash Rate History)

Where rates sit today

With the cash rate at 4.10%, the average variable rate for owner-occupier loans currently sits around 6.10% to 6.40% depending on the lender and loan features. However, the best available rates from competitive lenders can be significantly lower - sometimes by 0.50% or more below the average.

This spread between what borrowers are currently paying and what is available in the market is the core reason refinancing is worth exploring. According to the RBA's Lenders' Interest Rates data, as of January 2026 the average rate on outstanding owner-occupier loans was 5.48%, while the average rate on new loans was 5.42%. While the headline gap between existing and new borrower rates has narrowed, the real opportunity often lies in switching to a different lender or product altogether - not just comparing averages.

Five signs it might be time to refinance

Not every borrower should refinance, and the decision depends on your individual circumstances. However, there are clear signals that a review is worthwhile:

  • You haven't compared your rate in over 12 months. Lender pricing changes frequently. If your last review was before the 2025 rate cuts, your current deal may no longer reflect the best available.
  • Your fixed rate is about to expire. Borrowers rolling off fixed rates in 2026 may face a sharp increase when reverting to a variable rate. Acting two to three months before expiry gives you time to negotiate or switch.
  • Your property has increased in value. If your loan-to-value ratio (LVR) has improved - for example, dropping below 80% - you may qualify for better pricing tiers and avoid Lenders Mortgage Insurance on a new loan.
  • Your financial situation has changed. A higher income, cleared debts or a shift from single to dual income can improve your borrowing profile and open up more competitive options.
  • You are paying for features you don't use. If you have an offset account, redraw facility or package deal that you rarely use, a simpler, lower-rate product may save you more.

How much could refinancing save?

The potential savings depend on the rate difference you can achieve. Here are two worked examples based on standard principal-and-interest repayments over 25 years:

Example 1: $600,000 loan

  • At 6.30%: repayments of approximately $3,971 per month
  • At 5.80%: repayments of approximately $3,793 per month
  • Saving: $178 per month ($2,136 per year)

Example 2: $800,000 loan

  • At 6.30%: repayments of approximately $5,295 per month
  • At 5.80%: repayments of approximately $5,057 per month
  • Saving: $238 per month ($2,856 per year)

These figures are indicative examples based on standard amortisation calculations. Your actual result will depend on your loan amount, remaining term, rate secured and any fees involved.

Costs to factor in

Refinancing is not free, and the savings need to outweigh the costs involved. Common costs include:

  • Discharge fee: Your current lender may charge a fee to close your existing loan, typically $150 to $400.
  • Application or establishment fee: Some new lenders charge an upfront fee, though many waive this to win your business.
  • Valuation fee: The new lender may require a property valuation, often $200 to $600.
  • Break costs (fixed rate only): If you are on a fixed rate, breaking the contract early can result in significant fees depending on the remaining term and rate movements.
  • Government fees: Mortgage registration and discharge fees vary by state. In Queensland, expect around $200 to $400 in total.

As a general rule, if your annual savings exceed the total switching costs within the first 12 months, refinancing is likely worthwhile.

The refinancing process

If you decide to proceed, here is what to expect:

  • Step 1 - Review your current loan. Check your current rate, remaining balance, loan features and any exit costs.
  • Step 2 - Compare options. A mortgage broker can compare across 50+ lenders to identify the most competitive deal for your situation.
  • Step 3 - Apply. The new lender will assess your application, including income verification, a credit check and a property valuation.
  • Step 4 - Settlement. Once approved, the new lender pays out your existing loan and the new facility begins. This typically takes two to four weeks.

Most borrowers find the process straightforward, particularly when working with a broker who manages the paperwork and lender communication.

Common mistakes to avoid

  • Focusing only on the interest rate. A lower rate with high fees or missing features (like an offset account) can end up costing more overall.
  • Extending your loan term. Refinancing to a new 30-year term when you had 22 years remaining can reduce monthly repayments but increase total interest paid significantly. Ask your broker to match or shorten your remaining term.
  • Ignoring cashback offers. Some lenders offer cashback incentives of $2,000 to $4,000 for refinancing. These can offset switching costs, but make sure the underlying rate and loan structure are competitive - not just the incentive.
  • Not accounting for your goals. Refinancing should align with your financial objectives - whether that is reducing repayments, paying off your loan faster, accessing equity or consolidating debt.

Should you refinance right now?

There is no single right time to refinance. The best time is when the numbers work in your favour and your circumstances support a change. With rates back at 4.10% and lenders competing for business, there are genuine opportunities for borrowers who take the time to compare.

If you would like to understand whether refinancing could improve your position, get in touch with our team for a free loan review. We compare across 50+ lenders and can give you a clear picture of your options. Call us on 1300 004 483.

Data sources: RBA Cash Rate History, RBA Lenders' Interest Rates (January 2026). Repayment examples are indicative only, based on principal-and-interest repayments over 25 years at the stated rates. Actual savings depend on individual circumstances.