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Calculating the cost of refinancing your home loan

Like with a lot of big financial decisions, there are some costs to refinancing that you’ll want to consider before switching loans.

Refinancing fees can put a lot of homeowners off from switching loans. That’s why we’re going to break down the different cost considerations you should think about before applying.

What are the costs from the outgoing lender?

Discharge costs

Your outgoing lender is likely to charge you a discharge cost. This is a fee that you’ll pay if you’re switching from one lender to another. It also covers the costs of getting any documentation sorted out to help with the switch.

Break costs

If you’re on a fixed loan and want to end it early (or refinance it) then you are likely to incur a break cost. There’s no set amount for your break cost – the final fee amount will depend on any losses your current lender might have because of your early exit.

What are the costs from the incoming lender?

Loan application fee

Your new lender will charge you an application fee. This is a one-off fee that you’ll pay so the lender you’re refinancing to can set up your new home loan. These fees can vary from lender to lender, so it’s a good idea to contact your new bank or lender to see how much this might cost when refinancing.

Title search fee

If your new lender needs to look up the title of your property, you might have to pay a title search fee for this service. This helps the lender find information about your property so they can work out how much to lend you.

Lenders Mortgage Insurance (LMI)

You might have to pay Lenders Mortgage Insurance (LMI) if you have less than 20 per cent of equity in your current home. This can be a costly fee, so it’s always a good idea to ensure you have the right amount of equity ready to go before refinancing.

Property valuation

Your new lender will have to value the property – and you might have to pay them to do so. A lender needs to look at the property so they can get a proper picture of your equity before they give you the stamp of approval.

How can you prepare for these costs?

These costs can seem overwhelming – we get it! There are some nifty ways to make covering your refinancing fees simple.

Make a budget

See where you can make changes in your spending and saving habits. Our budget planning calculator can help you map out your finances so you can plan for your refinancing costs.

Chat to your lender

As some of these costs might already be absorbed by the lender, it’s a good idea to chat to them for further information.

Ask yourself some questions

Answering these thought-starters can help you decide if refinancing is the right choice for you:

  • Are the fees associated with refinancing worth going through the process?
  • Will refinancing put you in a better position?
  • How will refinancing help you achieve your goals?
  • Are you in a good position to refinance now?
  • How much can you save by refinancing?

Quick tip: We have a refinancing repayments calculator you can use to work out how much you’ll be paying back with your new loan.

More from the refinance hub

Discover the property investment essentials that all beginners need to know.

The dos and don'ts of refinancing a home loan

When it comes to refinancing your home loan, there are some common mistakes people might make. Discover the do's and don'ts of refinancing in our article.

Read more
Why you might refinance your home loan

Is refinancing your home loan the right thing for you? There are many reasons why you might refinance your home and you can learn about them in our article.

Read more
Which refinancing option is right for you?

With so many different refinancing options out there, it might be tricky to pick the right one. But fear not – we explain the different options in our article.

Read more
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Basic Variable Home Loan
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Comparison rate^
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Owner occupier, principal & interest, LVR 70% or less. Includes discount on new and additional lending. Min. loan amount applies.1,2,3
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Important Information

Rates are current as at 20 August 2024 and subject to change.

Great Southern Bank, a business name of Credit Union Australia Ltd ABN 44 087 650 959, AFSL and Australian Credit Licence 238317. Lending criteria, limits, conditions, and fees apply. Applications are subject to credit approval.

Published interest rates are inclusive of any discounts off the respective Reference Rates. Interest rates and discounts vary based on the loan purpose (owner occupier and investor), repayment type (principal and interest, interest only, construction) and Loan to Value Ratio (LVR). Maximum LVR applies and includes Lenders' Mortgage Insurance and Great Southern Bank loan setup fees where applicable.

1 Discounts off the Basic Variable Reference Rate are available to (a) new home loans with a minimum application amount of $100,000; or (b) switching or restructuring of the home loan you already have with us when it includes new borrowing of at least $10,000; for new home loan applications unconditionally approved on or after 9 June 2024.

2 Great Southern Bank may withdraw or amend this offer at any time without notice. A change in your loan purpose, your repayment type or your loan product will permanently end your entitlement to the discount.

3 LVR means ‘Loan to Value Ratio’. It is the amount of your loan divided by the valuation of your property, calculated as a percentage. For example, if you apply for a loan of $400,000, which will be secured by a property valued at $500,000, your LVR is 80%. We calculate your LVR at the time we approve your loan and your discount won’t change because of changes to the LVR during the life of your loan.

4 A $200 minimum withdrawal amount applies for redraws conducted in-branch.

5 The Boost is not available on business accounts.

^ Comparison rate accurate for $150,000 secured loan over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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