Loan Essentials
August 2025
Inflation has been heading in the right direction and the Reserve Bank of Australia has cut the cash rate three times in 2025.
So, is now a good time to refinance?
The decision as to whether to refinance depends largely on your individual situation and goals. Here are a few key considerations to think about when deciding whether or not to refinance.
In positive news, the consumer price index (CPI) rose by 2.1 per cent over the 12 months to the June quarter, while the trimmed mean annual inflation was 2.7 per cent to the June quarter. This is the figure the RBA pays close attention to when deciding what to do with the cash rate.
With trimmed mean inflation now at its lowest since December 2021 and well within the RBA’s target band of 2-3 per cent. There is a strong case for further cash rate cuts if inflation and economic growth continue on their current path.
The RBA’s latest Statement on Monetary Policy offered fresh insights into the outlook. Despite markets expecting lower rates since May, the RBA’s inflation forecast remains steady, with the trimmed mean sitting at 2.6 per cent for the next two years.
Financial markets are currently pricing in a cash rate low of 2.9 per cent by December 2026 before edging back up to 3.1 per cent in 2027. If the RBA’s projections are correct, they suggest the economy can operate with a cash rate around 3 per cent and inflation will remain within their target band.
Given the three rate cuts so far this year, there’s a lot of competition amongst lenders to get mortgage holders through the doors.
By refinancing, you may access an attractive cash back offer that helps you get ahead with your goals or secure a more competitive home loan rate. Refinancing and setting you up with a home loan with interest-saving features like a redraw facility or offset account could also help you get ahead financially.
It’s hard to know exactly how soon the RBA will cut the cash rate again. While refinancing will depend largely on your individual situation and goals, there are mounting reasons why refinancing should be on your radar. At the very least, now is a good time to review your home loan to make sure it still measures up, particularly if you fall under any of the following categories.
You can technically refinance at any point after your home loan has settled. But just because you can doesn’t always mean you should. The timing needs to make financial sense, ideally saving you more in interest than you’ll spend in upfront costs.
Here are some of the most common (and strategic) times to refinance:
If your current home loan was locked in at the cycle’s peak, you may be paying more than is necessary on your mortgage. If you’ve had the same home loan for several years, chances are you could be getting a more suitable offer with another lender, so it’s worth exploring your options and shopping around.
Have your financial circumstances changed since you took out your original home loan? If so, all the more reason to consider refinancing to a home loan that marries with your current financial situation and long-term objectives.
If you’re juggling multiple debts at once, such as a personal loan and credit card debt, it may be worthwhile considering debt consolidation.
With debt consolidation, you essentially roll all your debts into your home loan. It means you only have to make one repayment, making it easier to manage your debt.
It’s important to remember that you may end up paying more interest over the life of the loan if you go down this road, so speak to us and we’ll crunch the numbers for you.
Want to make a big-ticket purchase, like buying an investment property or doing a home renovation? Refinancing to access your equity could help you achieve these kinds of goals.
This is a common window where refinancing starts to pay off. You’ve likely built some equity, and lenders may offer better rates or loan features based on your improved position. If you’re still on the same loan after two years, it’s worth reviewing. Banks count on long-term customers not shopping around.
Fixed-rate periods often revert to a higher variable rate. Refinancing just before this happens can help you avoid a sharp increase in repayments. Some lenders also offer cash-back incentives to win your business during this period. Just be mindful of any break fees if you’re still mid-term.
There’s no legal limit on how often you can refinance your home loan in Australia. In theory, you could refinance multiple times a year, but in practice, it’s only worth doing when the long-term savings outweigh the upfront costs.
Each time you refinance, you may face:
Break fees (if you’re on a fixed rate)
Discharge and application fees
Property valuation costs
A credit check and potential impact on your credit score
Frequent refinancing can also trigger clawbacks for brokers, which some lenders frown upon. If you refinance too often, it may be harder to get approved for another switch down the track.
A good rule of thumb?
Refinance when there’s a clear financial benefit, typically no more than once every 12–24 months unless your circumstances or rates have changed significantly.
If you’re considering refinancing, reach out to us for a home loan health check.
We can help you work through all the options out there and find you a refinancing home loan to suit your specific circumstances and goals. We’ll also explain any costs involved and help you weigh up whether it’s worth refinancing.
Get in touch today.
