Change Home Loan Bank? Here's How to Save Big

Have you ever found yourself wondering if you're truly getting the best deal on your home loan? With the fluctuating market and recent interest rate hikes, many Australians are reconsidering their current home loan arrangements. Whether it's the allure of lower interest rates, better customer service, or more favourable terms, changing your home loan bank could potentially save you thousands of dollars. But how do you know if it's the right move for you?

Understanding Changing Your Home Loan Bank

Changing your home loan bank, commonly referred to as refinancing, involves moving your existing mortgage from one lender to another. This can be a strategic decision to secure a lower interest rate, access more favourable loan features, or consolidate debts. In 2026, with interest rates varying between 6.49% and 12%, the opportunity to optimise your financial standing has never been more pronounced. But before jumping ship, it's crucial to understand both the benefits and the potential drawbacks of refinancing.

Current Rates, Requirements, and Options

When considering a switch, it's important to compare current interest rates, which can range significantly depending on the lender and your financial situation. Some of the key factors that lenders consider include your credit score, the value of your property, and your employment stability.

At Esteb and Co, with our access to 83+ lenders, we can help you navigate this complex landscape to find an option that aligns with your financial goals.

Steps to Change Your Home Loan Bank

Refinancing your home loan doesn't have to be a daunting task. Here's a step-by-step guide to help you through the process:

1. Assess Your Current Loan: Begin by reviewing your current home loan terms, interest rate, and any fees associated with your account.
2. Compare Lenders: Use resources like Esteb and Co to compare different lenders and their offerings. Look for lower interest rates, better features, and terms that suit your lifestyle.
3. Calculate the Costs: Determine the costs associated with switching. This may include discharge fees from your current lender and establishment fees with the new one.
4. Apply for Pre-Approval: Once you've chosen a new lender, apply for pre-approval to understand how much you can borrow and under what terms.
5. Submit Your Application: Gather necessary documents, such as proof of income and property valuation, and submit your application.
6. Settlement: Once approved, your new lender will handle the settlement process, paying out your old loan and establishing the new one.

Expert Tips and Considerations

Before making a decision, consider these expert tips:

• Check for Break Costs: If you're on a fixed-rate loan, be aware of potential break costs for ending your loan early.
• Look Beyond the Interest Rate: While a lower rate is attractive, also consider the loan features and flexibility.
• Review Your Financial Goals: Ensure that switching aligns with your long-term financial objectives, such as paying off your loan sooner or reducing monthly repayments.
• Consult a Mortgage Broker: A broker, like those at Esteb and Co, can provide tailored advice and access to a wide range of lenders to find the best match for you.

Frequently Asked Questions

1. Is there a best time to refinance my home loan?
   Typically, refinancing is beneficial when interest rates are lower than your current rate, or when your financial situation has significantly improved.
2. How often can I refinance my home loan?
   There's no legal limit, but frequent refinancing may incur additional costs that outweigh the benefits.
3. Can I switch my home loan if I have a bad credit history?
   While challenging, it may be possible with some lenders. It's advisable to consult with a mortgage broker to explore your options.
4. Will refinancing affect my credit score?
   Applying for a new loan results in a credit inquiry, which may slightly impact your score temporarily.
5. What documents do I need to refinance my home loan?
   Typically, you'll need recent payslips, proof of identity, your current loan statement, and details of your assets and liabilities.
6. Are there fees involved in switching banks?
   Yes, there can be discharge fees from your current lender and application or setup fees with the new lender.