The backdrop
- Rates: the cash rate is 4.60% after four 2026 rises.
- Values: Canberra values fell 1.6% over the year and are 6.2% below the May 2022 peak (Cotality).
- Refinancing activity: owner-occupier external refinancing — switching to a different lender — totalled $41.9 billion in the June quarter 2026, according to ABS Lending Indicators. Canstar’s analysis put total refinancing at $67.1 billion, down 2% on the quarter but 6% higher than a year earlier. Plenty of people are still switching, but the pace has come off its peak.
The checklist
1. Estimate your equity honestly
Your new lender orders a valuation. If your LVR ends up above 80%, lenders mortgage insurance (LMI) may apply, which can cancel out the benefit of switching. Example only: a $640,000 loan against a $820,000 value is a 78% LVR. If the home values at $780,000, the LVR is about 82%.
2. Check your fixed-rate expiry
Know your roll-off date and the rate your lender will move you to when the fixed term ends. Lenders don’t always make the revert rate obvious, so ask for it in writing. Breaking a fixed loan early can trigger break costs, which vary with how much of the term is left and how rates have moved since you fixed. Ask your lender for a break cost figure before you commit to anything.
3. Expect to be reassessed
Lenders apply APRA’s 3-point buffer, and since 1 February 2026 they also watch debt-to-income ratios.
4. Count all the costs
Discharge, application, valuation and government fees, plus any break costs.
5. Ask your current lender first
A rate review with your current lender may be enough.
6. Look beyond the rate
Offset, redraw, fees, loan term and your fixed/variable split.
7. Beware cash-out traps
Rolling short-term debt into a 30-year loan can cost more over time.
What this means for you
Refinancing isn’t automatically the right move. In a falling market, the valuation and your LVR decide what’s possible. Estimate your equity, check fixed-rate dates, then compare. A broker can check valuation and LMI policies across a panel of lenders.
Start with our refinancing page, use our loan calculators, or apply online. If repayments are already difficult, read our article on hardship options and call the National Debt Helpline on 1800 007 007.
Sources
- Cotality, Home Value Index, October 2026 — https://discover.cotality.com/hubfs/Article-Reports/COTALITY%20HVI%20OCT%202026%20FINAL.pdf
- APRA, Activating debt-to-income limits as a macroprudential policy tool — https://www.apra.gov.au/news-and-publications/activating-debt-income-limits-macroprudential-policy-tool
- Australian Bureau of Statistics, Lending indicators, June Quarter 2026 — https://www.abs.gov.au/statistics/economy/finance/lending-indicators/latest-release
- Canstar, Investors retreat as new home lending suffers over $5 billion blow — https://www.canstar.com.au/news/investors-retreat-as-new-home-lending-suffers-over-5-billion-blow/
General information only. This article does not consider your objectives, financial situation or needs and is not credit advice. Seek personalised advice before acting. Figures are examples only. Credit Star — M.J. Siver trading as Credit Star Company, Credit Representative 506564 of BLSSA Pty Ltd ACN 117 651 760, Australian Credit Licence 391237.