Cost to Refinance a Mortgage
in Australia

Breakdown of refinancing costs

Understanding the full cost of refinancing is essential before you decide to switch. Here is what you can expect to pay:

• Discharge fee: $150 to $400 — charged by your current lender to release the mortgage from your property title
• Application or establishment fee: $0 to $600 — charged by your new lender to set up the loan. Some lenders waive this fee entirely
• Settlement and legal fees: $200 to $800 — covers conveyancing, title searches, and mortgage registration with the state government
• Valuation fee: $0 to $400 — some lenders require a property valuation as part of the application. Many offer free desktop valuations
• Break costs (fixed loans only): varies — if you are breaking a fixed-rate loan before the end of the fixed period, break costs can range from a few hundred to several thousand dollars depending on how far rates have moved since you locked in
• Lenders Mortgage Insurance (LMI): varies — may apply again if your equity is below 20 per cent. LMI can cost thousands and is a significant factor in whether refinancing makes sense

The biggest hidden cost

Fixed-rate break costs are the most unpredictable expense in refinancing. They are calculated based on the difference between your fixed rate and current wholesale rates, multiplied by your loan balance and remaining fixed term. In some market conditions, break costs can run into the tens of thousands of dollars, making refinancing uneconomical even with a significantly lower rate.

Always request a break cost estimate from your current lender before committing to refinance.

How to calculate whether the costs are worth it

The simplest way to assess whether refinancing costs are justified is to calculate your break-even point:

Break-even = Total refinancing costs divided by monthly savings

If your break-even point is under 12 months and you plan to hold the loan for several years, the costs are likely worthwhile. If break-even stretches beyond 24 months, look more carefully at whether the switch makes sense.

Use the free savings calculator in our refinancing guide to estimate your break-even point, or read about how much you could save by refinancing.

Frequently asked questions