Refinancing in 2026: the complete guide

Published 10 August 2026 · DeMarque Home Loans

The last two years have been a rollercoaster for home loan rates: three cuts through 2025, then three hikes in the first half of 2026. If you haven’t looked at your loan since the direction changed, this guide is for you.

Refinancing simply means replacing your current home loan with a new one — either with your existing lender (a repricing or internal refinance) or a new lender (an external refinance).

In a market that has moved this much, the loan that was competitive when you took it out may be a long way off the pace now.

Where rates sit right now

As at 10 August 2026, the RBA cash rate is 4.35%. It got there the hard way: cuts in February, May and August 2025 took it down to 3.60%, before inflation returned and the RBA reversed course with hikes in February, March and May 2026.

The average owner-occupier variable rate is around 6.92%, while the sharpest advertised variable rates start around 5.69% — a gap of well over one percentage point.

That gap is the whole refinancing story. Lenders reserve their best pricing for new customers, and existing borrowers drift onto less competitive rates over time.

What that gap is worth

On a $600,000 loan with 25 years to run, the difference between 6.92% and 5.99% is about $348 a month — roughly $4,176 a year.

Even moving from 6.92% to 6.30% saves about $234 a month.

Run your own numbers with our refinance savings calculator — it works out the monthly saving, the lifetime saving, and how quickly the switching costs pay for themselves.

When refinancing makes sense

Common triggers we see:

• Your rate is noticeably above what new customers are being offered — check yours against the market.
• Your fixed term is ending and you’re about to roll onto your lender’s standard variable rate.
• Your circumstances have improved — more equity, better income — and you now qualify for sharper pricing.
• You want features your current loan lacks, like an offset account, or you want to consolidate other debts into your home loan.
• Your loan no longer fits: you’re renovating, investing, or restructuring.

When it doesn’t

Refinancing isn’t automatic. It may not stack up if your loan balance is small (the fixed costs loom larger), if you’d restart a 30-year term and pay more interest overall despite a lower rate, if break costs on a fixed loan outweigh the saving, or if your equity has slipped below 20% and lenders mortgage insurance would apply. We cover the numbers in what refinancing actually costs.

And if you’ve tried to refinance and been knocked back on serviceability, you’re not out of options — see our guide for mortgage prisoners.

The process, step by step

1. Health check. Establish what you’re paying now — rate, fees, features. Our free home loan health check does this in a few minutes.
2. Compare. We look across our panel of lenders at what your profile genuinely qualifies for — not just the advertised headline rates.
3. Apply. Documents are similar to your original application: income, expenses, statements for the loan being refinanced.
4. Valuation and approval. The new lender values your property and assesses serviceability at a buffer above the actual rate.
5. Settlement. The new lender pays out the old loan. Your old lender discharges the mortgage; you start repayments on the new one.

Allow a few weeks end to end — completeness of documents and valuation turnaround are the usual variables.

A broker’s role

We do the comparison, the paperwork and the lender negotiation, and with residential mortgages the lender — not you — pays the broker’s commission. Talk to us or start with the health check.