Let’s get refinancing your home loan off your to-do list

How we calculate Home Loan Finder Scores

Read full methodology

What different scores mean

9+

Excellent

These fixed rate home loans offer low costs, coupled with a host of features, giving the best overall value.

7+

Great

These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.

5+

Standard

Usually the home loans would offer above average rates. They may still include some competitive features.

0+

Basic

Higher costs and/or fewer features.

The lowdown on Finder Score

• 9+ Excellent - These low deposit home loans offer low costs, coupled with a host of features, giving the best overall value.
• 7+ Great - These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.
• 5+ Satisfactory - Usually the home loans would offer above average rates. They may still include some competitive features.
• Less than 5 – Basic - Higher costs and/or fewer features.

Tell me more about the refinancing home loan score

The Finder Score is an easy, data-driven way to judge home loans at a glance. Here's how:

• Every month, our insights team analyses more than 7,000 home loans across 120+ lenders.
• We assess the most important features, rate them, and then combine them via a weighted methodology to create a simple score out of 10.

The Finder Score is designed by our insights and editorial team. We score home loans objectively, Finder's commercial partnerships don't affect the scores at all.

Remember that Finder Score is just one factor to consider. Look at other aspects like fees, features, benefits and risks to make sure a product is suitable for you. Double-check details that matter to you before applying or buying.

The nitty gritty: how Finder Score is calculated

The Finder Score examines the costs and features of each home loan. These are combined to create the final score.

Frequent Flyers Points

The cost of the home loan makes up 85% of the score. The other 15% is made up of features that come with the home loan.

• Show the cost component breakdown

  Here's how we weigh each factor in the cost component.

  Cost Components (85% of overall score)	Calculation Methodology
  Interest	Calculated over a $500,000 loan amount and 30 year loan term. The cumulative interest paid is calculated over 5 years, 3 years and 1 year for variable rates, long term fixed rates and short term fixed rates respectively.
  Application Fees	Added to the cost, if applicable
  Settlement Fees	Added to the cost, if applicable
  Ongoing Fees	Calculated over 5 years, 3 years and 1 year for variable rates, short term fixed rates and long term fixed rates respectively.
  Legal Fees	Added to the cost, if applicable
  Valuation Fees	Added to the cost, if applicable
  Cashback	Added to the cost, if applicable
  Frequent Flyer Points	Converted to a dollar value based on ticket prices/redeemable gift cards and deducted from the cost

• Show the features component breakdown

  Here's how we weigh each factor in the features component.

  Features Components	Calculation Methodology
  Offset Account (5% of final score)	Each variant is assigned 10 points if they have a full offset account and 5 points if they have a partial offset account. No points are awarded if the variant does not have this feature.
  Extra Repayments and Redraw (5% of final score)	Each variant is assigned 10 points if they have this feature. No points are assigned if they do not have this feature.
  Loyalty Discounts (5% of final score)	Each variant is assigned 10 points if they have this feature. No points are awarded if they do not have this feature.

Your home loan refinance questions answered

• When you should not refinance?

  There are some rare situations where refinancing could cost you more than you could save by switching:

  • Your fixed rate break costs are too high. If the cost of breaking a fixed rate loan is too high, then refinancing may not be worth it.
  • Your equity is below 20% of the property's value. If you own less than 20% of the property at its current value, then you will have to pay lenders mortgage insurance when you refinance. Even if you paid it for your original loan.
  • Your loan amount is small or you're selling soon. If you don't have much left to repay on your home loan, then the savings from refinancing might not be worth the hassle. If you're planning on selling within the next 6 months, then the effort and cost involved in refinancing could also cancel out any financial rewards.

• Can I refinance a fixed rate loan?

  You can refinance a fixed rate home loan, but you have to pay a break fee for exiting the loan early during the fixed period. If you are close to the end of the fixed period on your loan, then this fee will be smaller, but if you have a few years left, it could cost thousands. Your current lender can provide you with a break cost estimate to help you decide if the cost is worth it.

• Is it still worth it to refinance now?

  There's never really a bad time to refinance as long as you can find a loan with a lower interest rate that's more suited to your current needs.

  When interest rates are falling, switching can unlock big discounts. When rates are rising, you can still get a better deal if you find a lender with a more competitive offer.

  The lending market is a crowded field, and lenders are frequently offering lower rates to entice new business.

• How much equity do I need to refinance?

  Theoretically, you can refinance your loan no matter how much or how little equity you have. But if your equity is under 20% of your remaining loan amount, then refinancing, while possible, gets expensive. This is because your new lender will charge lenders mortgage insurance if your equity is below 20%.

• Should I refinance to a new 30-year loan?

  Most refinancers switch from a 30-year home loan to another 30-year loan. Even if they're many years into their original loan. That's fine and will keep your monthly repayments low. But you could save more money in the long run by switching to a shorter loan term.

  If you refinance 5 years into a 30-year loan term, you could switch to a 25-year loan. You'd pay more each month but end the loan at the same time as your original loan started.

  It's really a question of what works better for you. Do you want lower monthly repayments but a longer loan term (and more interest overall)? Or do you want to get a lower rate and pay the loan off faster with a shorter term?

  You can also stick to a new 30-year loan term but make extra repayments or build up offset savings. This has the same effect but gives you more options.

• What is the current refinance rate?

  Every lender sets its own interest rates for home loans. There's no one refinance rate. In fact, most lenders don't even have specific loans with rates just for refinancers (most loans are available to both new borrowers and people refinancing existing loans).

  Right now interest rates for owner-occupiers are as low as 5.39%.

• Do I need to refinance when getting divorced?

  When couples get divorced, there are hard decisions to make around property. You may decide to sell the home and share the profits, or let 1 person keep it.

  If 1 person decides to buy out the other person's half, you will need to refinance the mortgage when transferring the property title. Otherwise, the person selling would still be on the mortgage.

  You can also decide to keep the home loan as it is and continue to make repayments.

  It's always better if a divorcing couple can agree amicably on what to do with their property. But it's still a really good idea to get legal advice.

• How often should I refinance?

  You can refinance as often as you like, but given the time involved and the cost of registering a mortgage, it doesn't make sense to switch frequently. You're better off finding a good deal that will hopefully remain a good deal for a few years. If your rate creeps up and you find better options, then it's time to ask your lender for a discount. And if that doesn't work, then you should switch.

• Can I refinance my home loan with the same bank?

  Yes. You can switch to a better loan with your current lender. Or you may be converting a property from your residence into an investment property. In this case you'd need to refinance your home loan to an investment loan.

Finder's loan comparison disclaimer

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Richard Whitten

Money Editor

Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 605 Finder guides across topics including:

• Home loans
• Property
• Personal finance
• Money-saving tips