Refinance or reprice? Working out which move makes sense

If your home loan has not been looked at for a while, there are two broad ways to improve it. You can reprice, which means asking your current lender to lower your rate or change your product. Or you can refinance, which means moving the loan to a different lender. Both can work. The right choice depends on what you are paying now, what you could get, and what the move would cost.

Know where you are starting from

Find your current interest rate, the remaining balance, the remaining term and any monthly or annual fees. Your latest statement or online banking usually shows these. If part of the loan is fixed, note when the fixed period ends. Rates on the market can differ by a meaningful margin between lenders, so it is worth checking from time to time.

Repricing: the quick ask

Contact your lender and ask whether they can offer a lower rate. Being specific helps: mention a comparable rate you have seen for a similar loan. Lenders may reduce your rate to keep your business, especially if you have built up equity and have a solid repayment history. If they offer something, compare it properly with the alternatives rather than accepting the first reduction.

Refinancing: count every cost

Moving to a new lender can involve costs that reduce or outweigh the saving from a lower rate. Common ones include:

• A discharge or termination fee to close your current loan.
• A break fee if you leave a fixed rate early. This can be significant.
• An application or establishment fee and settlement costs for the new loan.
• Government registration fees to discharge and register the mortgage.
• Lenders mortgage insurance, if you have less than 20% equity in your home.

Some lenders offer cashback or fee waivers. Treat these as one part of the picture: a slightly higher rate can cost more over time than a one-off incentive returns.

A simple way to decide

Work out your monthly saving after fees, then divide your upfront switching costs by that saving. The answer is roughly how many months it takes to recover the cost of switching. If that is a short time compared with how long you expect to keep the loan, refinancing may be worth exploring further. If the proposed loan does not cost less each month, there is no break-even on those assumptions.

Our refinance comparison tool does this calculation from the numbers you enter, keeping switching costs separate and using the same remaining term for both loans.

Think beyond the rate

Features matter too. Moving can mean losing an offset account you rely on, changing how redraw works, or resetting a fixed period. Your circumstances may also have changed since you first borrowed, which can affect what new lenders offer. A broker should consider these things, not just the headline rate.

How Onlend fits

Onlend is planned to help you compare your current loan with what could be available, show switching costs clearly and make the trade-offs plain. If staying put is the better option, that is a good result too.