The total cost: $800–$1,500 for most borrowers
The total cost of refinancing a standard Australian home loan typically falls between $800 and $1,500. For most borrowers, this is recovered within 2–4 months of the improved rate. The exact amount depends on your existing lender, whether a valuation is needed, and whether the new lender charges application fees.
Typical refinancing cost summary
Each cost explained
1. Discharge fee ($150–$400)
When you pay out your existing loan and close the account, your current lender charges a discharge fee to cover the administrative cost of releasing the mortgage registered on your property's title. This is not the same as an exit fee — exit fees on loans originated after 1 July 2011 were banned under the National Consumer Credit Protection Act. Discharge fees are legal and are charged by virtually all lenders. The typical range is $150–$400, with major banks generally at the higher end.
2. Property valuation ($0–$400)
The new lender needs to confirm the current value of your property to establish your LVR. Many lenders use automated desktop valuations (AVMs) for straightforward properties — these are typically free and completed within 24 hours. Full physical valuations by a registered valuer are required for higher-value, unusual, or rural properties, and cost $200–$600 when not waived by the lender.
In a competitive market, many lenders waive the valuation fee entirely to win your business. Your broker will identify which lenders are currently offering fee-free valuations as part of their refinancing package.
3. New lender application / settlement fee ($0–$600)
Some lenders charge an upfront application fee or an annual fee for loan maintenance. Others — particularly non-bank lenders competing aggressively for new customers — waive these entirely. In 2025, with strong competition for quality refinancing customers, many lenders are waiving application fees as a standard offer. Your broker negotiates this on your behalf.
4. Legal / conveyancing ($0–$300)
In most standard refinances, the new lender handles the title transfer and discharge through PEXA (electronic conveyancing) with minimal cost to you. Some lenders include this in their settlement fee; others charge it separately. Complex situations — unusual property structures, trust ownership, or multiple securities — may require your own solicitor at additional cost.
5. Mortgage stamp duty — mostly abolished
Mortgage duty (stamp duty on the mortgage instrument itself) has been abolished in most Australian states and territories for refinancing the same property:
| State / Territory | Mortgage Duty on Refinance | Notes |
|---|---|---|
| Queensland | None | Abolished |
| Western Australia | None | Abolished |
| South Australia | None | Abolished |
| Tasmania | None | Abolished |
| ACT | None | Abolished |
| Northern Territory | None | Abolished |
| New South Wales | None (same property) | Exempt for same-property refinance |
| Victoria | None (same property) | Exempt for same-property refinance |
Always confirm with your broker or conveyancer for your specific situation. Duty may apply if adding borrowers, changing security, or in certain commercial or trust structures.
Costs that catch borrowers off guard
Fixed rate break costs
If you are still within a fixed rate period and want to refinance, your lender will charge a break cost. This is not a fee — it is calculated based on the interest rate differential between your fixed rate and current wholesale rates, multiplied by your remaining fixed term and loan balance. In some interest rate environments, break costs can be substantial — sometimes exceeding $10,000–$20,000 on large loans with long remaining terms.
Always ask your lender for a written break cost quote before refinancing a fixed loan. Your broker will factor this into the cost-benefit analysis.
Fixed rate break cost alert: Never assume your break cost is zero. Call your lender and request the exact figure in writing before proceeding. We see borrowers surprised by break costs regularly — it is always the first calculation in our assessment for fixed-rate clients.
Lenders Mortgage Insurance (LMI)
If your LVR is above 80%, refinancing may trigger LMI at the new lender — even if you paid LMI on the original loan. LMI is not transferable between lenders. Premiums vary by lender and loan size but can range from $5,000 to $30,000+ for high-LVR loans. In most cases, refinancing above 80% LVR is only worthwhile if the rate improvement is very significant, or if there is a specific strategic reason to switch lenders despite the LMI cost.
The break-even calculation
To confirm refinancing makes financial sense for your situation:
- Calculate total switching costs including all applicable fees above
- Calculate monthly saving at the new rate on your current loan balance and remaining term
- Divide costs by monthly saving to get your break-even in months
Example: $600,000 loan. Current rate 6.5%, new rate 5.75%. Total switching costs $1,200. Monthly saving: approximately $375. Break-even: 1,200 ÷ 375 = 3.2 months. Over a 5-year horizon, net saving after all costs: approximately $21,300.
How to minimise your costs
- Use a broker — brokers know which lenders are currently waiving fees and can negotiate on your behalf. The cost difference between the worst-case and best-case fee scenario is often $800–$1,200.
- Ask about cashback offers — some lenders periodically offer refinancing cashbacks of $2,000–$4,000. Your broker will flag these when available and factor them into the net cost calculation.
- Avoid fixed rate refinancing unless break costs are low — always get the written break cost figure first.
- Keep your LVR below 80% — avoiding LMI is the single biggest cost saving in refinancing.