In the past, most people who took out a mortgage continued with it until they had paid it off. These days, people refinance their mortgage much more frequently with the average duration of a home loan in Australia now is just 4-5 years. Below, we look at some of the reasons people in Australia refinance their home loan…

Lower Rate

The most common reason for people to refinance their mortgage is to get a better deal BUT be careful you don’t become interest rate-fixated. When you refinance your home loan, you need to consider fees and charges as well as the interest rate. You often have to pay charges for exiting your current home loan, plus charges for taking out the new mortgage. You need to be sure that in refinancing your home loan that you’ll be better off in the long run after taking into account all costs.

Increased Flexibility

Many people only discover or understand the full details regarding their mortgage when it’s too late. They try to do something and get told by their lender that they either can’t do it, or will incur a hefty charge if they do so!
For example, a redraw facility – whereby you have the ability to pay extra money into a mortgage and then redraw it later. This feature is not possible with a basic home loan, so many people refinance their mortgage to give themselves this sort of increased flexibility.


If you are wanting to undertake renovations on your home, it often makes sense to refinance your mortgage and take out a construction loan so you only pay interest as building progresses. Once construction is finished, it might make sense to refinance your home loan again so that you consolidate the total amount you owe into a loan that minimises your interest bill, whilst giving you flexibility to access equity.

Access Equity

Over recent years in the property market houses have appreciated at a significant rate. For example, a home bought for $300,000 five years ago, might now be worth $500,000 therefore refinancing your mortgage might allow you tap into an extra $200,000 in equity.


Sometimes, people find they have borrowed more than they can comfortably repay, and they’re in danger of defaulting. There’s no shame in that. But don’t suffer in silence. If you’re having trouble making your mortgage repayments, talk to us about refinancing your home loan to make it more manageable.

If you would like us to explain any of the features of your current home loan or think you might want to refinance. Please feel free to CONTACT US.

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