Refinancing 101: How It Works & How Much You Could Save
What Is Home Loan Refinancing?
If you’ve been wondering what refinancing is all about, you’re not alone.
With interest rates rising since May 2022, more homeowners—about 28,000 per month—have turned to refinancing to reduce their mortgage costs.
However, a Finder report shows that one-in-five Australians aren’t familiar with refinancing, and 63% admit to being only slightly confident about the process.
Let’s break it down so you can decide if refinancing is right for you.
How Refinancing Works
Replacing Your Old Loan with a Better Deal
Refinancing means switching your current mortgage to a new lender or loan option.
📌 The process includes:
✅ Choosing a new home loan with better terms
✅ Submitting a formal application with income and expense details
✅ Having the new lender pay off the existing mortgage
💡 The good news? Refinancing typically takes just four weeks from start to finish!
Why Homeowners Choose to Refinance
Lower Your Interest Rate & Reduce Financial Stress
Refinancing can provide benefits such as:
🔹 Accessing home equity
🔹 Improving loan features
🔹 Consolidating personal debts
But the number one reason to refinance is to secure a lower interest rate—which can cut hundreds or even thousands of dollars from annual repayments.
📌 According to Finder, 60% of refinancers felt stressed about their mortgage before switching lenders. If higher repayments are causing financial strain, refinancing could be the stress-buster you need.
How Much Could You Save by Refinancing?
Banks Offer Better Rates to New Customers
Lenders reward new customers with better rates than existing mortgage holders.
📌 Current rates:
🔹 Existing loan holders: 6.20% interest
🔹 New loan holders: 5.99% interest
That 0.21% difference may seem small, but for an average refinanced home loan of $526,093, it could save over $840 in the first year alone (based on a 30-year term).
📌 Want to estimate your savings? Use the Our Home Loan Calculator to check potential costs and refinancing benefits.
Is Refinancing Right for You?
Get Expert Advice Before You Switch
If you’re feeling the interest rate squeeze, it’s time to explore refinancing options. Go to our dedicated page on refinancing here
Also look at our switching refinancing costs calculators here
At CBM Mortgages, we can:
✅ Review your current loan & assess your refinancing potential
✅ Compare lenders to find better rates
✅ Help you secure the best home loan deal
📞 Contact CBM Mortgages today to discuss how much you could save by switching lenders!
Read our exit fees when refinancing here
Read our blog on when to refinance here
Disclaimer
This article provides general information only and does not constitute financial advice. Always consult a qualified financial advisor or mortgage broker to assess your personal situation before making any financial decisions.
Written by Craig McDonald 14/06/2025
