Refinancing can save thousands — but it is not free. Understanding the costs involved before you switch is essential to knowing whether refinancing actually benefits you. Here is a clear breakdown of every cost you might encounter.
When you leave your current lender, they charge a discharge fee to release the mortgage on your property. In Australia this typically ranges from $150 to $400 depending on the lender. Some lenders have reduced or waived discharge fees in competitive markets, but you should always confirm this with your current lender before proceeding.
If you are on a fixed rate loan, breaking the fixed term early can trigger a significant break cost — sometimes thousands of dollars. Break costs are calculated based on the difference between your contracted rate and current wholesale rates, multiplied by the remaining fixed period and loan balance. They are unpredictable and can be substantial.
Lendology calculates your break cost before recommending a refinance on a fixed rate loan. In some cases — particularly when rates have risen since you fixed — the break cost is minimal or even zero. In others it makes refinancing uneconomical until the fixed period ends.
Refinancing involves discharging the existing mortgage and registering a new one on the title. In South Australia this incurs state government fees of approximately $186 for the mortgage registration. This applies even when refinancing with the same lender.
Some lenders charge application or establishment fees ranging from $0 to $600. Many competitive lenders have eliminated these fees entirely. We compare the full cost of ownership — including upfront fees — when presenting your refinancing options.
The break-even calculation is straightforward: divide the total switching costs by your monthly saving to find the number of months until you break even. For example, if switching costs $1,500 and saves you $200 per month, you break even in 7.5 months. If you plan to hold the loan longer than that, refinancing is beneficial.
Lendology runs this calculation for every refinancing client before recommending a switch. We show you the net saving figure — after all costs — so you know exactly what you stand to gain.
Every formal loan application results in a credit enquiry which can temporarily affect your score. Lendology minimises this by identifying the right lender before submitting an application, rather than applying to multiple lenders simultaneously.
In most cases yes, provided you have sufficient equity. Rolling costs into the loan means you pay interest on them over time, which affects the true saving — we factor this in when modelling your options.
Sometimes worth taking. We can tell you whether the rate your current lender is offering is genuinely competitive, or whether there is a better deal available elsewhere that they are unlikely to match. In some cases staying and negotiating is the right move.
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