Every year around this time, conversations about whether to refinance start to pop up more often.
As the year winds down and everyone begins thinking about what they want next year to look like, it is completely normal to take a closer look at your finances and wonder if there is a smarter way forward.
The Christmas rush starts, the bills pile up, and suddenly the idea of getting your home loan into better shape feels a lot more appealing than it did a few months ago.
I am hearing the same question from many homeowners right now. Is it a good time to refinance, or should you wait until the new year?
With interest rate talk still dominating the news and property prices powering along, it makes sense that people want clarity.
So, let us take a calm, clear look at what is happening in the housing market and whether refinancing now could be the right move for you.
What is happening in the market right now
Refinancing is one of those times when a little homework pays off.
Lenders are shifting their offers, and many borrowers are actively switching to better deals. The real question is whether now is the right time for you personally, rather than making a decision based on headlines.
The Reserve Bank has kept the cash rate on hold at $3.60% which keeps a floor under current mortgage costs.
We are also seeing a strong wave of refinancing activity, which shows that borrowers are searching for lower rates and better loan features.
Some banks have trimmed both fixed and variable rates, which has created momentum as customers look for savings that will carry them into the new year.
What this means for your home loan
The impact on you comes down to three simple things:
- Your current interest rate and loan features
- Your break costs and exit fees if you are on a fixed rate
- How long you plan to keep the loan or the property
If your current rate is noticeably higher than comparable market offers, then refinancing can put money back in your pocket each month and over the life of the loan.
But it’s important to factor in any switching costs! Fixed-rate break fees can be significant, and some lenders add application or discharge fees.
The key is making sure that the savings outweigh the costs within a timeframe that feels comfortable for you.
A quick example to show the potential savings
Imagine you have a $600,000 loan and your current rate is $5.50%. You find a new loan at $4.40% and your refinancing costs come to $3,000.
Your monthly repayments would fall by about $540, and you would recover the refinancing costs in a little over five months.
Beyond that, the lower rate continues to deliver ongoing savings. This is a simplified example, but it shows why so many borrowers are considering a switch.
Thinking about future interest rates
Another factor is what you expect interest rates to do next year. If you believe rates will keep falling then a new fixed rate might not always be the best choice because variable rates could become more appealing later.
If lenders are offering strong fixed deals for a short window, though, it can be reassuring to lock in certainty around repayments. Your comfort with risk and your cash flow preferences play a big role here.
How refinancing works and what happens next
If you are considering refinancing, it helps to know exactly what the process looks like from start to finish. The steps are straightforward and much easier with guidance.
You begin by reviewing your current loan, including your interest rate, loan features and any fees involved in exiting.
From there, we compare your situation with a selection of suitable lenders so you can see what your options look like side by side.
Once you choose a preferred lender, an application is submitted along with supporting documents such as payslips, bank statements and identification.
The new lender then orders a valuation of your property and completes their assessment.
If approved, they issue the loan contract for you to sign. After the contract is finalised, the new lender arranges settlement, which is the point where your old loan is paid out, and the new loan begins.
The whole process can be smooth and efficient with the right help, which means your focus stays on the benefits rather than the paperwork.
Practical steps to take before you refinance
- Check the full cost of leaving your current loan, including any break costs or discharge fees.
- Compare like-for-like, including offset accounts, redraw options, and repayment flexibility.
- Ask a broker to create a short list of lenders who are likely to consider your situation quickly.
- Run the numbers to find the break-even time for your refinancing costs.
So, is now the right time to refinance?
The answer depends on your current loan, your goals, and how comfortable you feel with the timing.
For many borrowers, it’s an immediate win. For others, it is worth slowing down and gathering more certainty.
If you want a personalised refinance check, we can walk you through it in a quick discovery chat so you know whether the numbers stack up for your situation.
This blog is intended for general informational purposes only. For personalised advice tailored to your unique financial situation, please contact NMC Finance.
