10 Signs It's Time to Refinance Your Home Loan

Your fixed rate is ending, or you've been on the same variable rate for three years.

Either scenario could be costing you hundreds every month, and in Dubbo and across Central West NSW, we regularly see homeowners stuck on rates well above what's currently available. Refinancing isn't something you do once and forget about. Your home loan needs reviewing at specific moments in your ownership, and knowing when those moments arrive makes the difference between paying more than you should and keeping your mortgage working in your favour.

Your Fixed Rate Period Is Ending in the Next 90 Days

When your fixed rate expires, you'll automatically revert to your lender's standard variable rate, which is typically 1% to 1.5% higher than their current advertised rates for new customers. On a loan amount of $400,000, that difference adds up to $4,000 to $6,000 a year in additional interest.

Consider a homeowner in South Dubbo whose three-year fixed rate at 2.19% is expiring. Their loan balance sits at $380,000, and their current lender's revert rate is 6.84%. If they refinance to a competitive variable rate around 6.09%, they'll save roughly $240 per month, or close to $2,900 in the first year alone. The refinance process typically takes four to six weeks, so starting the conversation 90 days before your fixed rate ends gives you time to compare options, lodge an application, and settle before the revert rate kicks in. You can read more about managing this transition on our fixed rate expiry page.

You Haven't Reviewed Your Rate in Two Years or More

Interest rates shift, lender pricing changes, and your current loan might no longer reflect what's available in the market. Lenders reward new customers with sharper pricing, and loyalty rarely translates into discounts on your existing mortgage.

If you took out your home loan before the recent rate cycle, or if you've been with the same lender for more than two years without requesting a rate review, you're likely paying more than necessary. A home loan health check compares your current rate and features against what's available now. In many cases, refinancing can reduce your interest rate by 0.50% to 1.00%, which on a $500,000 loan translates to annual savings of $2,500 to $5,000. Even after factoring in discharge fees and application costs, the reduction in interest often covers those expenses within the first six months.

You Want to Access Equity for a Deposit on an Investment Property

Property values in Dubbo have risen steadily over the past few years, and if you bought your home five or more years ago, you've likely built up usable equity. Refinancing lets you access that equity without selling your current property, and it's one of the most common reasons regional buyers expand their portfolio.

As an example, a homeowner in West Dubbo purchased their property several years ago. The home is now valued higher, and their remaining loan sits at $320,000. With 80% of the current valuation being $440,000, they have $120,000 in accessible equity. By refinancing and increasing their loan amount to $440,000, they pull out $120,000 in cash to use as a deposit on an investment property in Tamworth. The refinance also allows them to restructure their lending so the investment loan is interest-only, improving cashflow while the property appreciates. More detail on this strategy is covered on our investment loans page.

Your Loan Doesn't Have an Offset Account and You're Building Savings

If you're keeping $20,000 or $30,000 in a savings account earning minimal interest while paying 6% or more on your mortgage, you're losing money every month. An offset account linked to your home loan reduces the balance on which interest is calculated, and every dollar in offset works as hard as a dollar in loan repayment.

Refinancing to a loan structure with a full offset account makes sense if you maintain a cash buffer for emergencies, irregular income, or upcoming expenses like school fees or vehicle replacement. On a $450,000 loan at 6.10% with $30,000 sitting in offset, you'd save around $1,830 per year in interest compared to keeping that $30,000 in a separate savings account. Not all loans include offset as standard, and some lenders charge a higher rate or annual fee for the feature, so the refinance conversation should weigh the cost against the benefit based on how much you typically hold in savings.

You're Paying Lenders Mortgage Insurance on a Loan That Now Sits Below 80% LVR

Lenders Mortgage Insurance is a one-time cost charged when you borrow more than 80% of the property's value, but once your loan balance drops below that threshold through repayments or property appreciation, you're no longer in LMI territory. Refinancing won't refund the LMI you've already paid, but it does mean you can switch lenders or restructure your loan without incurring LMI again.

If your property has increased in value or you've made extra repayments and your loan-to-value ratio is now 75% or lower, refinancing opens up access to sharper rates and products that weren't available when you first borrowed. It also removes the need to factor LMI into any future top-up or restructure, giving you more flexibility if your circumstances change.

You Want to Consolidate Personal Loans or Car Finance Into Your Mortgage

Personal loans and car finance typically carry interest rates between 7% and 12%, while mortgage rates sit well below that range. Consolidating higher-interest debt into your home loan reduces your overall interest cost and simplifies repayments into a single fortnightly or monthly amount.

In our experience, this approach works when the debt being consolidated is short-term and the borrower commits to maintaining the same total repayment amount after refinancing. Rolling $40,000 of car and personal loan debt into a mortgage at 6.10% instead of paying 9% saves roughly $1,160 per year in interest. The risk is extending that $40,000 over 25 years instead of clearing it in three or four, which increases the total interest paid over the life of the loan. Structure matters, and the refinance should include a plan to clear that portion of the loan within a set timeframe, either through extra repayments into a redraw facility or by splitting the loan and targeting the consolidated portion separately.

Your Income or Employment Has Changed and You Want a Different Loan Structure

A change in income, whether from a pay rise, a shift to self-employment, or a move to part-time work, can make your current loan structure less suitable. Refinancing allows you to adjust your loan type, repayment schedule, or split between fixed and variable to match your current circumstances.

If you've moved from PAYG employment to running your own business, some lenders offer more favourable terms for self-employed borrowers than others, and refinancing can improve your serviceability assessment or give you access to features like offset and redraw that your original lender might not have offered. Similarly, if your income has increased and you want to make larger repayments without penalty, switching to a loan with unlimited extra repayments and full redraw gives you that flexibility. Our self-employed home loans page covers how lending options differ depending on your income structure.

You're Stuck on a High Interest Rate After a Default or Credit Event

If you took out your mortgage with a credit impairment on your file, you likely paid a higher interest rate to reflect that risk. Once the default or judgment is more than two years old and you've demonstrated consistent repayment behaviour, mainstream lenders will often consider your application at standard rates.

Refinancing after your credit profile has improved can reduce your interest rate by 1% to 3%, depending on the original terms. On a $350,000 loan, a 1.5% reduction saves around $5,250 per year. Timing matters, and most lenders want to see at least 12 months of on-time repayments on your current loan, along with two years since the credit event. The refinance application will require a clear explanation of what caused the default and evidence that your financial position has stabilised.

You Want to Lock In a Fixed Rate Before Further Rate Movements

Variable interest rates respond to Reserve Bank decisions and lender funding costs, and if you're concerned about further increases or want certainty over your repayments, refinancing to a fixed rate can provide that stability. Fixed rates are typically priced based on the lender's expectation of future rate movements, so they won't always sit below the current variable rate.

The decision to fix depends on your cashflow, your tolerance for repayment fluctuations, and how long you plan to hold the property. Fixing for one to three years suits borrowers who want short-term certainty without giving up the flexibility to refinance or sell in the near term. Fixing for five years can deliver long-term security but limits your ability to make extra repayments or exit the loan without incurring significant break costs. In regional areas like Dubbo, where employment is often tied to agriculture, healthcare, and education sectors with stable but not rapidly growing incomes, fixed rates appeal to households that need predictable budgeting.

You're Buying Your Next Home and Want to Restructure Your Existing Loan

If you're moving from your current home into a new property and plan to keep your existing home as an investment, refinancing both loans at the same time allows you to structure the debt tax-effectively and often secure pricing discounts for multiple loans with the same lender. Splitting your lending so the investment portion is interest-only and the owner-occupied loan remains principal and interest improves cashflow and maximises your tax deductions on the investment property.

This scenario is common among Dubbo families moving from an older home in East Dubbo or Tamworth Road into a newer build in South Dubbo or North Dubbo, and choosing to rent out the original property rather than sell. Refinancing at the point of purchase also means you can access equity from the first property to use as a deposit on the second, avoiding the need to save another full deposit while property values continue rising. Our next home buyers page walks through the process in detail.

Refinancing your mortgage makes sense when your current loan no longer matches your circumstances, your rate sits above what's available, or you need to access equity for a specific purpose. Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions