Home Loan Refinance? Discover Relief Without Deposit

Refinancing your home loan can be a strategic move to take advantage of better interest rates or loan features. But a common question that arises is, "Do I need a deposit to refinance my home loan?" Whether you're looking to reduce your monthly repayments or access equity for other financial goals, understanding the deposit requirements is crucial for a seamless refinancing process.

Understanding Refinancing and Deposits

Refinancing involves replacing your current home loan with a new loan, often with a different lender. This process can help you secure a lower interest rate, switch from variable to fixed rates, or consolidate other debts. When it comes to deposits, the good news is that refinancing typically does not require an additional deposit. However, there are several factors to consider, such as your current loan-to-value ratio (LVR) and the equity you have built up in your property.

Current Market Rates and Refinancing Requirements

As of 2026, the Australian home loan market offers a variety of interest rates, generally ranging from 6.49% to 12%. The specific rate you'll qualify for depends on your financial profile, the lender, and the type of loan product. Lenders also have criteria for refinancing, typically requiring a maximum LVR of 80% to avoid Lenders Mortgage Insurance (LMI).

Lender	Interest Rate Range	Max LVR Without LMI
Lender A	6.49% - 7.25%	80%
Lender B	6.75% - 8.00%	85%
Lender C	7.00% - 9.50%	90%

At Esteb and Co, with access to over 83 lenders, we can help you find the right loan that fits your circumstances. Each lender might have different policies regarding refinancing, so it's essential to explore your options thoroughly.

Steps to Refinance Your Home Loan Without a Deposit

1. Evaluate Your Current Loan: Start by reviewing your current loan terms, interest rate, and outstanding balance.
2. Check Your Home Equity: Calculate your home equity by subtracting your current mortgage balance from the estimated market value of your home.
3. Research the Market: Compare the interest rates and features of different home loans. Esteb and Co can provide insights into the best options available.
4. Apply for Pre-Approval: Once you've chosen a lender, apply for pre-approval to understand how much you can borrow.
5. Submit Your Application: Provide all necessary documentation, including proof of income and property details, to your chosen lender.
6. Review Loan Offer: Carefully review the loan offer, including any fees or charges, before accepting.
7. Settlement: Once approved, your new lender will pay off your existing loan, and you'll begin repayments on your new mortgage.

Expert Tips and Considerations

• Consider Fees: Be aware of exit fees from your current lender and any application or settlement fees for the new loan.
• Evaluate Loan Features: Look beyond interest rates and consider features like offset accounts or redraw facilities that may benefit you.
• Timing Matters: Refinancing at the right time can maximise your savings, so keep an eye on interest rate trends.
• Seek Professional Advice: Consulting with a mortgage broker like Esteb and Co can provide tailored advice and simplify the refinancing process.

Frequently Asked Questions

1. Do I need a deposit when refinancing?
   No, typically you do not need a deposit to refinance your home loan, but you must have sufficient equity.
2. What is equity, and why is it important?
   Equity is the difference between your home's market value and the outstanding mortgage balance. It's crucial because it determines your borrowing power.
3. Can I refinance if my LVR is above 80%?
   Yes, but you might need to pay Lenders Mortgage Insurance (LMI) or find a lender with more flexible criteria.
4. How often should I consider refinancing?
   Review your home loan every two to three years or whenever interest rates change significantly.
5. Can refinancing help me access funds for renovations?
   Yes, refinancing can allow you to access your home's equity, which you can use for renovations or other expenses.
6. How long does the refinancing process take?
   The process typically takes 4 to 6 weeks, depending on the lender and complexity of your application.
7. Are there any downsides to refinancing?
   Possible downsides include fees, resetting your loan term, and the risk of higher rates if you choose a fixed loan and rates decrease.