Refinance Home Loan? Here's How to Save with Ease

Refinancing your home loan can be a powerful tool to unlock better interest rates, access equity, or consolidate debt. But can you refinance your home loan with the same bank? Many Australian homeowners find themselves asking this question as they seek to improve their financial situation without the hassle of changing lenders. In this comprehensive guide, we'll explore the ins and outs of refinancing with your current bank, providing you with all the information you need to make an informed decision.

Understanding Refinancing with the Same Bank

Refinancing with the same bank, often referred to as a "loan restructure" or "internal refinance," allows you to renegotiate the terms of your home loan without the need to switch lenders. This can be a convenient option if you're satisfied with your bank's service but want to benefit from lower interest rates, reduce your monthly repayments, or access equity for other financial goals.

It's important to note that banks may offer promotional rates to new customers, which can sometimes be more competitive than the rates available for existing customers. However, refinancing with your current bank could still be beneficial if you're looking for a straightforward process and want to avoid the paperwork and fees associated with switching lenders.

Current Rates, Requirements, and Options

As of 2026, interest rates in Australia have seen fluctuations due to economic conditions. The Reserve Bank of Australia (RBA) has set the cash rate at 3.85%, and banks are offering home loan rates ranging from 6.49% to 12%, depending on the loan product and customer profile. When considering refinancing with your current bank, it's crucial to understand the specific rates and terms they offer for existing customers.

Eligibility criteria for refinancing with the same bank typically include:

• A good credit score (generally above 620)
• A stable income and employment history
• At least 20% equity in your home
• Proof of ability to meet the new loan repayments

Here's a comparison of typical refinancing options available with your current bank:

Steps to Refinance with Your Current Bank

Refinancing with your existing bank can be a straightforward process if you follow these steps:

1. Review Your Current Loan: Understand your current loan terms, interest rate, and any exit fees.
2. Research Current Offers: Check if your bank has any special offers for existing customers. You might also consult Esteb and Co to see how these compare with options from their panel of 83+ lenders.
3. Contact Your Bank: Reach out to your bank to discuss your refinancing goals. Ask about potential rate reductions or product changes.
4. Submit Documentation: Provide necessary documents such as proof of income, identity, and property details.
5. Negotiate Terms: Don’t hesitate to negotiate for better terms or ask for fee waivers.
6. Complete the Application: Once satisfied, complete the refinancing application with your bank.

Tips and Considerations

Before finalising your decision to refinance with your current bank, consider the following expert tips:

• Assess All Costs: Consider all fees involved, including break costs on fixed loans, application fees, and ongoing fees.
• Compare Offers: Even if you're inclined to stay with your current bank, compare their offer with those from other lenders to ensure you're getting the best deal. Esteb and Co can provide insights from their extensive lender network.
• Check for Loyalty Discounts: Some banks offer loyalty discounts to long-term customers, which could enhance your savings.
• Consider Flexibility: Ensure the new loan terms offer flexibility for future changes, like making extra repayments or switching to a different product if needed.

Frequently Asked Questions

• Can I refinance with my bank if I have less than 20% equity?
  It may be possible, but you might need to pay Lender's Mortgage Insurance (LMI), which can increase costs.
• How often should I consider refinancing?
  Consider refinancing every few years or when interest rates drop significantly, to ensure you're not paying more than necessary.
• Will refinancing affect my credit score?
  A refinancing application will result in a hard inquiry on your credit report, which can temporarily affect your score.
• Is it better to choose a fixed or variable rate when refinancing?
  This depends on your risk tolerance and financial situation. Fixed rates offer stability, while variable rates offer flexibility.
• Can I refinance my investment property with the same bank?
  Yes, refinancing an investment property with your current bank is possible and follows a similar process to refinancing a home loan.
• What should I do if my bank refuses my refinancing request?
  Consider consulting with a mortgage broker like Esteb and Co to explore alternative lenders and solutions.