Refinance home loan costs

What are the hidden costs of refinancing a home loan?

Refinancing is rarely free, even when the new lender advertises no application fee. The costs that catch people out are the ones the headline rate doesn't show: a discharge or settlement fee from your current lender, a new loan application or valuation fee, government mortgage registration and discharge charges, and break costs if you're leaving a fixed rate early. On top of that, if you stretch the loan back out to a fresh 30-year term, a lower rate can still mean more total interest over the life of the loan.

None of this means refinancing is a bad idea. It means the only number that matters is the saving after every one of these costs is counted, not the gap between the two advertised rates.

Which refinancing fees should you add up?

Before you switch, ask both lenders in writing for every fee. The common ones look small on their own but add up to a real break-even period you need to clear before the new rate pays for itself.

How much does it cost to refinance a home loan in Australia?

Put real numbers on it rather than a range. The table below is what the lenders on the Ratesniffers panel publish for a refinance, read from each lender's own fee schedule and recorded on the Ratesniffers lender pages (Westpac and NAB verified 2 November 2026; CommBank and ANZ verified 9 November 2026; ING verified 10 October 2026). Discharge fees cluster at $350 at the majors and lower at the online lenders; establishment fees run from $0 to $600 depending on the product; a rate lock, if you fix, is a separate charge.

Comparison rates in the Ratesniffers tables already fold ongoing fees into the percentage, so when you compare refinance options by comparison rate the one-off switching costs below are what remain to be counted.

What are the government fees to refinance?

Every refinance involves two dealings at your state land registry: a discharge of the old mortgage and registration of the new one, and the registry charges for each. The fees are set by each state, usually change on 1 July, and the lender passes them on at settlement.

New South Wales: NSW Land Registry Services charges $166.60 excluding GST ($182.73 including GST) for a mortgage and the same for a discharge of mortgage from 1 July 2026, so about $365 for the pair. Western Australia: Landgate charges $225.10 for a mortgage and $225.10 for a discharge in 2026-27, about $450 for the pair. Victoria and Queensland publish their 2026-27 schedules on the Land Use Victoria and Titles Queensland sites linked below; check the current figure there rather than relying on a quoted number.

What is the break-even point on a $600,000 refinance?

Take the Ratesniffers Home Loan Rate Index as the yardstick. As of 4 November 2026 the average advertised owner-occupier variable rate across the verified 80% LVR panel was 6.56% p.a. and the lowest was 6.18% p.a., a gap worth about $2,280 a year on a $600,000 loan, roughly $190 a month, before switching costs.

Against that saving, a typical switch at a major bank in New South Wales costs about $350 to discharge, $0 to $600 to establish the new loan, up to $200 to settle, and about $365 in registry fees, so roughly $900 to $1,500 in total. Divide the costs by the monthly saving and the break-even point lands at five to eight months. A borrower who keeps the loan longer than that comes out ahead; one who sells or refinances again sooner does not. Your own figures depend on your current rate, balance and the rate you qualify for, which is what the refinance savings calculator models.

Break-even months = total switching costs divided by the monthly saving. On the November 2026 index gap, a $600,000 loan clears about $1,000 of switching costs in about five months.

How does the break-even point change by loan size?

As at November 2026, the gap between the average and lowest verified owner-occupier variable rate across 26+ lenders Ratesniffers tracks is 0.38 points (6.56% p.a. average against 6.18% p.a. from Bank of China). Applying that live gap and the $900 to $1,500 switching-cost range from the table above across three representative loan sizes gives a concrete break-even range for each, rather than the single $600,000 figure above.

Can refinancing to a lower rate still cost you more?

Yes, and it's the trap most borrowers miss. When you refinance you usually reset the loan term back to 30 years. A lower rate on a longer term can lift your total interest paid even though the monthly repayment drops, because you're paying interest for more years. The fix is simple: keep your repayment at the old amount, or set the new loan to the years you had left, so the lower rate shortens the loan instead of just lowering the monthly figure. On a $600,000 loan our guide to how to pay off your mortgage faster puts a modelled dollar figure on keeping the old repayment, using hypothetical rates.

The honest test of a refinance is the break-even point: divide the total switching costs by the monthly saving. If you'll move or sell before you clear it, the lower rate may never pay for itself.

When is refinancing genuinely worth it?

Refinancing tends to pay off when the rate gap is meaningful, you plan to keep the loan well past the break-even point, and your equity is strong enough to avoid paying LMI a second time. It can also be worth it for reasons beyond rate, such as consolidating debt or unlocking an offset, but those benefits should be weighed on their own merits, not bundled into a rate comparison.

• Count every fee from both lenders, in writing, before deciding.
• Work out the break-even point and compare it to how long you'll keep the loan.
• Keep your repayment at the old level so the lower rate shortens the loan.
• Check whether LMI gets charged again if your equity is under 20%.