Your Home Loan Interest Rate Is Rising. Is It Time to Start Refinancing Home Loan?

The rate-cut era is firmly behind us. A run of increases this year has pushed the cash rate back to 4.35%, landing right where it sat at the start of 2025. The difference this time: there are no cuts pencilled in for the foreseeable future.

For a lot of Perth households, that means tighter budgets and harder choices. But accepting every rate rise from your current lender isn't the only path forward.

A home loan refinance to a lender with a sharper rate could reduce your monthly repayments and ease the pressure on your finances. Osinski Finance is a family-owned mortgage brokerage in Rockingham that brings 25 years of combined banking and finance experience, helping WA homeowners navigate this exact scenario every day. 



Here is what you need to know.

Are You Paying More Than You Should Be? 

Australia has one of the most competitive home lending markets in the world. With more than 130 lenders available, including the big four banks and smaller credit unions through to online-only and specialist lenders, there are genuine options at every price point. The catch is that so much choice can feel overwhelming, which is exactly why more than seven in ten Australian homeowners still hold their mortgage with one of the major banks.

That brand loyalty costs money. Smaller and non-bank lenders don't carry the overhead of a nationwide branch network, which means other 126 lenders can often offer sharper rates and strong loan features without asking you to compromise on service. The question isn't whether a better deal exists. It almost certainly does. The question is whether you're positioned to find it.

How Much Could You Save with a Home Loan Refinance? 

The numbers tell a compelling story. According to MoneySmart, the spread between the highest and lowest variable home loan rates in the Australian market can exceed 2%. Apply that to the average home loan of $735,000, and the first-year interest savings alone could reach $14,700.

Of course, not every borrower will capture the full 2% difference. Your individual rate will depend on your loan-to-value ratio, credit profile, and the lenders you qualify with. There are also costs involved in switching: discharge fees, application fees, and, in some cases, a break fee if you're currently on a fixed rate. A home loan refinance only makes sense when the savings comfortably outweigh those switching costs, and that's exactly the calculation a broker does before recommending a change.

What Does Refinancing Actually Cost?

Before you commit to switching, it's worth understanding the fees that may apply:

• Discharge (or termination) fee: charged by your current lender when you close out the existing loan
• Application fee: an upfront cost with the new lender
• Fixed rate break fee: applies if you're exiting a fixed rate period early; this can vary significantly depending on how rates have moved since you fixed
• Lender's mortgage insurance (LMI): if your equity has fallen below 20%, a new lender may require LMI, which can erode your savings considerably
• Switching fee: Some lenders charge this if you're moving between loan products within the same institution

The right broker weighs all of these against your projected savings and tells you honestly whether the numbers stack up.

When Does Switching NOT Make Sense?

Refinancing a home loan isn't the right move in every situation. It's worth pausing if:

• Your equity position means the new lender will require LMI, and paying this can take years to recoup
• You're well into a fixed-rate period, and the break costs are prohibitive
• Your remaining loan term is short, and the upfront costs won't be recovered in time. 
• Your financial situation has changed since you took out your original loan, and approval may be trickier to obtain

Being clear-eyed about these scenarios is as important as knowing when to switch. The goal is a better financial position overall, not just a lower interest rate on paper.

Try Your Current Lender First

Before shopping around, it costs nothing to ask your existing lender for a better deal. If you have at least 20% equity in your home and a solid repayment history, you have real leverage. Let them know you've seen what other lenders are offering and you're considering moving. To keep your business, many lenders will reduce your rate on the spot or present a retention offer.

Compare whatever they come back with against what else is in the market. Sometimes staying put on an improved rate is the right outcome. More often, the broker's panel still has something better.

How the RBA Cash Rate Flows Through to Your Repayments

Eight times a year, the Reserve Bank of Australia's Monetary Policy Board meets to decide whether to move the cash rate. So far in 2026, the RBA has increased the rate three times, in February, March, and May, pushing it back to 4.35%.

What matters for borrowers is how lenders respond. Most variable rate home loans move broadly in line with the cash rate, but not always by the same amount or at the same time. Your rate is also shaped by your personal creditworthiness, how much equity you hold, and competitive pressure in the lending market. This is why two borrowers with the same loan amount can end up paying meaningfully different variable home loan rates and why it pays to review your loan whenever the rate environment shifts.

Beyond the Rate: What Else Should You Consider?

A lower rate is the most obvious reason to switch, but it's rarely the only one. When reviewing your options, think about:

• Offset accounts: A fully offset variable loan lets you reduce your interest bill by keeping savings in an account linked to your mortgage. With rates where they are, the value of a well-structured offset arrangement is significant.
• Redraw facilities: Access to extra repayments you've made can act as a financial buffer when you need it.
• Repayment flexibility: Some borrowers benefit from the ability to make extra payments or change repayment frequency without penalty.
• Loan features vs rate: Occasionally, the lowest advertised rate comes with fewer features. A broker compares the full cost of the loan, not just the headline rate.

Who Has Time to Compare 130 Lenders?

That's where a broker earns their place. Our job is to work through a broad lender panel, identify the loans that fit your specific situation, and then narrow it to the options most likely to improve your position. Once you've selected your preferred loan and lender, we guide you through every step of the application and transition, and we stay in your corner for rate reviews and ongoing advice down the track.

Key Takeaways

• The RBA cash rate is back at 4.35% as of May 2026, with further cuts not expected in the near term
• Australia has over 130 home loan lenders, and the spread between the highest and lowest variable home loan rates can exceed 2%
• On an average loan of $735,000, a 2% rate improvement could save more than $14,700 in interest in the first year alone
• Refinancing a home loan makes sense when savings comfortably outweigh the switching costs. A broker can confirm this.
• Always ask your current lender for a better rate before switching; it costs nothing, and sometimes works
• Features like offset accounts and redraw facilities matter as much as the headline rate
• A mortgage broker compares lenders on your behalf at no cost to you, and only gets paid if a suitable loan settles

Talk to Osinski Finance About Your Options

Osinski Finance is a family-owned mortgage brokerage in Rockingham, WA, with 25 years of combined banking and finance experience. As the proud 2024 RKCC SME Business of the Year, we’ve supported hundreds of Perth homeowners in navigating changing interest rates, comparing loan options, and making confident financial decisions.

Whether you’re looking for a home loan, planning to invest in property, or considering refinancing your current home loan, we can help you understand your options and find a solution that fits your needs.

Our advice and service come at no cost to you. We work in your best interests, not the banks.

Get in touch with us today to discuss your options.

Frequently Asked Questions

How do I know if refinancing a home loan is worth it? 

The simplest way to find out is to have a broker compare your current rate against what's available to you right now. If the projected interest savings over a reasonable period exceed the costs of switching, refinancing makes sense. Key costs to factor in include discharge fees, application fees, and any break costs if you're exiting a fixed rate. A broker can run this calculation quickly and give you a clear answer without any obligation to proceed.

How does the RBA cash rate affect my home loan repayments? 

The RBA cash rate is the benchmark interest rate that flows through to borrowing costs across the economy. When the RBA raises the cash rate, most lenders pass on at least part of the increase to variable rate borrowers, usually within a few weeks. The reverse applies when rates fall. However, your actual rate also depends on your lender's pricing decisions, your personal credit profile, and your equity position, which is why reviewing your loan whenever the rate environment changes is good practice.

What fees are involved in switching home loans? 

The most common costs are a discharge fee from your current lender (typically $150 to $400), an application or establishment fee with the new lender, and potentially a valuation fee. If you're on a fixed rate, a break fee may also apply. In some cases, if your equity is below 20%, the new lender may require lender's mortgage insurance (LMI), which can be a high cost. A mortgage broker will identify all applicable fees before you decide whether to proceed.

Can I refinance if I'm self-employed? 

Yes. Self-employed borrowers sometimes face extra scrutiny from traditional banks, but many lenders on a broker's panel, including specialist and non-bank lenders, are experienced in assessing non-standard income. With the right documentation and guidance on how to present your financials, refinancing is very achievable. Osinski Finance has helped many self-employed Perth homeowners secure competitive rates.

Should I try to negotiate with my existing lender before refinancing? 

Yes, always try this first. It costs nothing, and if you have solid equity and a good repayment history, your current lender may offer a rate reduction to keep your business. If they do, compare what they offer against the broader market before accepting. Sometimes the retention offer is competitive; often, a broker can still find something better.

What's the difference between a variable and fixed rate home loan? 

A variable rate moves up or down in response to market conditions, including RBA cash rate changes. A fixed rate locks your repayments at a set amount for a nominated period, typically one to five years. Variable loans generally offer more flexibility (offset accounts, extra repayments), while fixed rates provide payment certainty. Many borrowers choose a split loan that combines both. A broker can help you weigh the options based on your situation and outlook on rates.

How long does it take for a home loan refinance? 

Most refinances take between two and six weeks from application to settlement. The timeline depends on how quickly you can provide the required documentation, the lender's assessment turnaround, and the discharge process with your current lender. A broker manages most of this on your behalf, which significantly reduces the time and paperwork involved on your end.

Does refinancing affect my credit score? 

When you apply for a new home loan, the lender will conduct a credit enquiry, which leaves a short-term mark on your credit file. Multiple enquiries in a short period can have a modest negative effect. Working through a broker can reduce this risk because the broker assesses your situation first and targets lenders where approval is likely, rather than submitting multiple speculative applications.

Is it possible to refinance if I have less than 20% equity? 

It's possible, but more complex. If your equity is below 20%, most lenders will require you to pay lender's mortgage insurance (LMI), which adds to your costs. In some cases, the LMI cost will outweigh any savings from a lower rate, making refinancing unviable until your equity improves. A broker can assess whether the numbers still work in your favour or advise you on the right time to revisit.

What happens after I refinance? Do I need to review my loan again? 

Yes. Refinancing isn't a set-and-forget decision. Lenders regularly adjust their pricing, and the rate environment changes. The Osinski Finance team provides ongoing rate reviews as part of the service, so once you're a client, you're not on your own. We'll flag when it's worth taking another look and compare your loan against the market at no additional cost.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.