Refinancing › What is refinancing and how does it work?

What is refinancing and how does it work?

Refinancing means replacing your existing home loan with a new one, either with your current lender or a different one. The new loan pays out the old one, ideally on better terms such as a lower rate or different features.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

Refinancing is one of the simplest ways to cut the cost of the biggest debt most people carry, yet many borrowers stay on a rate they were given years ago. The mechanics are straightforward, but the value comes from comparing the whole market, not just your own lender.

The key points

A new loan pays out and replaces your current one.
It can be with your existing lender or a new one.
The goal is usually a lower rate, lower repayments, or better features.

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What is your goal?

Buy a home or investment property First home, next home, or adding to your portfolio Build a house or develop land New build, renovation, duplex, or subdivision project Lower my current repayments Better rate, release equity, or restructure existing debt Finance an established commercial property Business premises or commercial investment asset

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Standard salary or wage Full-time, part-time, or casual employment (PAYG) Self-employed or business owner Sole trader, company director, or contractor

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Healthy No issues that I am aware of A few small marks A couple of late payments, now caught up Not sure, or it is complicated We work with specialist lenders for these situations

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More refinancing questions

Back to the full Refinancing guide

Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.