Internal vs External Refinance: What You Give Up Either Way
Property Lending
Refinance · Same lender or new lender · Self-employed
If you only want a lower rate, start by asking your current lender to reprice the loan. If you need a different structure, more money or a credit policy that better fits your circumstances, compare a same-lender refinance with moving. Staying usually means less friction; moving gives you more choice but normally means a new application, valuation and settlement.
Quick Answer
An internal refinance is a new or materially changed loan with the lender you already have, such as a product switch, a change of rate type or a higher limit; an external refinance is a new loan from a different lender that pays out the old one. A lower rate on the same loan is a reprice, and if that is all you want, ask your current lender for it first. Before you decide, compare the same remaining term, all switching costs, any new LMI, the valuation, features and the break-even time.
Also called: refinancing with your current lender or a same-lender refinance (internal), and switching lenders or refinancing to a new lender (external). Moneysmart uses internal refinancing for switching to a different loan with your lender; the official lending statistics count it only when the loan is replaced or increased.
What is an internal refinance, and how is it different from an external refinance?
An internal refinance is a new or changed loan with your current lender, such as a product switch, a change of rate type or a top-up; an external refinance is a new loan from a different lender that pays out and replaces the old one. A lower rate on the same loan is usually a reprice, which the official lending statistics do not count as a refinance.
Can I refinance with my current lender instead of changing banks?
Yes. You can stay with your current lender, but the lender may treat the request as a simple reprice, a product transfer, a variation or an internal refinance depending on what changes. A lower rate on the same loan is usually the lightest path; changing the structure, rate type, term or loan limit can trigger new documents, a valuation or a fresh serviceability assessment.
Before comparing the two, it helps to be clear on what refinancing means: replacing or restructuring an existing loan, usually secured over the same property. Three official sources use the internal label in slightly different ways, and each is right for its own purpose.
How Moneysmart uses it. ASIC's Moneysmart describes refinancing internally as staying with your current lender but switching to a different loan. That is the everyday meaning, and it is how most borrowers and many brokers use the term when they talk about a same-lender refinance.
How the official lending statistics count it. The Australian Bureau of Statistics counts an internal refinance where a new loan replaces one from the original lender and the credit limit has increased, or where the limit on an existing loan is increased, which is a top-up. An external refinance is a new loan that replaces one from a different lender. This is a statistical definition used to count lending, not a legal rule about what your lender can or cannot do.
How APRA's reporting guidance treats it. APRA's reporting guide for the same data collection treats an agreement to increase the credit limit of an existing loan contract, a top-up, as an internal refinance. It also says a limit that moves without any variation to the actual agreed loan conditions is not reported as one; its example is a margin loan limit that shifts with the market value of the collateral. This is reporting guidance for statistics and creates no entitlement for a borrower.
Put plainly, a phone call that gets you a lower rate on the same loan is a reprice. Everyday usage may call that an internal refinance; the statistics do not. The difference is more than wording, because what your lender re-checks depends on what actually changes in the loan, which is the subject of the next section. A move that adds money, such as taking cash out with your current lender, sits at the other end: it is an internal refinance on every definition, and it reopens the numbers the lender relies on.
The external side is simpler to define and heavier to do. A new lender writes a new loan, pays out the old one and registers its own mortgage. Self-employed borrowers on a specialist loan often take this path on purpose, for example moving a low doc loan to a bank rate once their tax returns are lodged and a full doc lender becomes an option.
How many borrowers stay and how many move. In the June quarter 2026, the ABS counted 43,848 owner-occupier internal refinances and 66,449 external refinances, seasonally adjusted. Staying has grown fast: owner-occupier internal refinances rose from 24,992 in the June quarter 2023 to 43,848 in the June quarter 2026, while external refinances fell from 81,401 to 66,449 over the same period. On our calculation from those ABS figures, internal refinances went from about 23% to about 40% of owner-occupier refinances. Because the ABS only counts an internal refinance when the limit rises, these figures exclude plain reprices.
| Borrower and route | Number of loans | Value | Change in number since June quarter 2025 |
|---|---|---|---|
| Owner occupier, internal refinance | 43,848 | $24.8 billion | Up 0.4% |
| Owner occupier, external refinance | 66,449 | $41.9 billion | Down 1.1% |
| Investor, internal refinance | 15,331 | $10.6 billion | Up 14.9% |
| Investor, external refinance | 36,597 | $25.2 billion | Up 5.3% |
Internal refinances in ABS statistics are new or increased loans with the same lender; plain reprices are not counted. Figures are national aggregates, not a guide to any lender's decision.
| Move | What happens | Moneysmart's everyday term | ABS lending statistics | Reassessment under APRA guidance (banks, residential loans) |
|---|---|---|---|---|
| Rate reprice | Same loan, same lender, lower rate | Negotiating a lower rate with your lender | Not counted as a refinance | Usually not, if nothing else changes |
| Product switch | Same lender, different loan or rate type | Internal refinancing | Counted as internal only if a new loan replaces the old one with a higher limit | Expected if the change is material, such as fixed to variable |
| Top-up or internal refinance with more money | Same lender, higher limit | Internal refinancing | Counted as an internal refinance | Expected, and the LVR is recalculated |
| External refinance | A new lender pays out and replaces the old loan | Switching to a new lender | Counted as an external refinance | Full new application at the new lender |
Sources: ABS, Lending indicators, June quarter 2026, released 14 August 2026, read 25 September 2026. ABS, Lending indicators methodology, June quarter 2026, released 14 August 2026, read 25 September 2026. APRA, RPG 701.0 ABS/RBA Reporting Concepts for the EFS Collection, June 2024, read 25 September 2026. ASIC Moneysmart, Switching home loans, last updated 29 July 2026, read 25 September 2026. APRA, APG 223 Residential Mortgage Lending, 19 June 2025, read 25 September 2026.
When does staying with your lender still mean a full reassessment?
A plain rate reprice that changes nothing else is not usually reassessed; a change to the loan's conditions can be. For how reassessment and APRA's limits work when a loan moves, including the test rate and debt-to-income settings in detail, see our portfolio guide; this section covers only what triggers a fresh look when you stay.
The key word is material. APRA's practice guide for banks, APG 223, expects a bank to undertake a new serviceability assessment whenever there are material changes to the current or originally approved loan conditions. The guide gives these examples:
- Principal and interest to interest-only. Switching the repayment type on the existing loan.
- A longer interest-only period. Extending an interest-only period that is already running.
- Fixed to floating, or the reverse. Moving the loan from a fixed rate to a variable rate, or from variable to fixed.
- A longer term. Extending the tenor of the loan.
- Higher total repayments. Any change that increases the total repayments over the life of the loan, even where the regular repayment falls.
This is APRA guidance for banks on residential loans; non-banks set their own policy, and practice varies.
If the limit rises, the security is looked at again too. APG 223 says sound practice includes recalculating the loan-to-value ratio at the time of any top-up and other formal loan increase during the life of the loan. The same guidance says any subsequent refinancing, including a second mortgage, would typically mean a new LVR calculated on a contemporary valuation, and that any significant increase in exposure would normally mean a full assessment of your repayment capacity. That is residential guidance for banks, and non-bank practice varies by lender.
When you are reassessed, the test rate is not the rate you pay. APRA kept its serviceability buffer, the margin a bank adds to the loan rate when it tests whether you can repay, at 3 percentage points at its 28 May 2026 review. It is reviewed periodically, individual lenders may set floors above it, and it is not a rate you pay. Limits on high debt-to-income ratio lending sit alongside the buffer at the portfolio level of each bank; how those settings interact with a particular refinance is covered in the portfolio guide rather than here.
What this means in practice: if all you want is a sharper rate on the loan you already have, a reprice is usually light work. If you want to change what the loan is, even with the same lender, plan for much of the paperwork you would give a new lender. That is the part of the staying option that is easy to underestimate.
Sources: APRA, APG 223 Residential Mortgage Lending, 19 June 2025, read 25 September 2026. APRA, APRA maintains current macroprudential policy settings, 28 May 2026, read 25 September 2026.
What do you give up when you move to a new lender?
Moving opens the whole market, but you start again: a new application, a new valuation, and the costs of leaving the old loan. Staying trades market choice for lower friction, while moving trades continuity for a wider choice of rates, products and credit policies. The table sets the three paths side by side.
| Item | Stay and reprice | Switch or refinance with your lender | Move to a new lender |
|---|---|---|---|
| New-customer offers | Limited to what your lender will match | Limited to your lender's range | Whole market, including any new-customer offers |
| Lenders mortgage insurance already paid | Kept | Usually kept on the existing loan; an increase may be assessed | Cannot be transferred; a new premium if the new loan needs one |
| Fixed-rate break costs | None if you stay on the fixed rate | May apply if you leave a fixed rate | May apply if you leave a fixed rate |
| Fees you are likely to pay | Usually none | A switching fee, set by your lender | A discharge fee on the old loan and an application fee on the new one, plus break costs if you leave a fixed rate |
| Offset and package features | Kept | Depends on the new product | Rebuilt at the new lender, if offered |
| Valuation | Not usually | Likely if the limit rises | New valuation |
| Credit assessment | Not usually | Required for a material change or an increase | Full new application |
| Discharge and mortgage registration | None | Usually none | Old mortgage discharged, new one registered |
| Business facilities on the same property | Unaffected | Usually unaffected | Must be refinanced, released or replaced |
| Crossed securities | Unaffected | Unaffected | Need the old lender's release |
| Credit policy you are assessed under | Your lender's | Your lender's | The new lender's, which may suit you better or worse |
General information. Every lender's policy differs; APRA's residential guidance for banks does not bind non-bank lenders.
Sources: APRA, APG 223 Residential Mortgage Lending, 19 June 2025, read 25 September 2026. QBE LMI, Understanding LMI, undated page, read 25 September 2026. ASIC Moneysmart, Switching home loans, last updated 29 July 2026, read 25 September 2026.
Lenders mortgage insurance is the cost most often missed. It protects the lender, not you, and it cannot be transferred to a new lender, so if the new loan needs it you pay a new premium. Moneysmart notes that if you have less than 20% equity in your home, you might have to pay LMI when you switch, and suggests asking for a refund of some of the LMI on your current loan if you do; whether any refund is available depends on your old lender and its insurer.
The exit costs. Moneysmart lists the costs of switching a home loan: a break fee if you leave a fixed rate loan early, a discharge fee to close the old loan, and an application fee for the new one. It also says you may be liable for stamp duty when you refinance, and to check with your lender. The amounts are set by each lender, and Moneysmart's guidance is written for consumer home loans, not business loans.
The process. The new lender orders its own valuation, runs a credit enquiry and assesses your income under its own policy. The old mortgage is discharged and the new one registered, which adds settlement time and a round of paperwork between two lenders.
The features. What you have built up does not travel with the loan. An offset account closes with the old loan, along with any split structure or package benefits, and whether you can rebuild them depends on the new lender's product range.
Business facilities. If a business overdraft, bank guarantee or other facility is secured over the same property, the move is bigger than one loan. Those facilities have to be refinanced, released or replaced; see what happens to business facilities on the same security.
None of this makes moving the wrong choice. It means the comparison is the whole cost of moving against the whole cost of staying. When the reason for moving is to restructure or fund the next stage of the business, refinancing to release equity is often where the extra effort pays for itself.
What do you give up when you stay with your current lender?
Staying keeps your loan intact, but you are limited to what one lender will offer, and new-customer deals are usually aimed at people arriving, not people staying. On average, though, the price of staying has become small: the Reserve Bank measured the spread between average outstanding and average new variable housing rates at just 4 basis points in its May 2026 Bulletin, and put that partly down to borrowers refinancing with another lender or negotiating with their existing one. That figure is an aggregate of variable housing rates only; individual loans vary, it says nothing about commercial, non-bank or specialist loans, and it is not a rate you will get.
The average hides a wide range. Moneysmart notes that variable home loan rates on the market can differ by more than 2%, so what matters is where your own loan sits against current offers, not what the average borrower pays. The rate rises of 2026, which Moneysmart records as increases to the cash rate in February, March and May, are what send many owners back to that comparison.
Sources: RBA, Developments in Banks' Funding Costs and Lending Rates, Bulletin, 28 May 2026, read 25 September 2026. ASIC Moneysmart, Switching home loans, last updated 29 July 2026, read 25 September 2026.
Staying is not always free either. Moneysmart lists a switching fee for refinancing internally, and the amount is set by each lender. It also suggests telling your current lender you plan to switch to a cheaper loan elsewhere, because to keep your business the lender may reduce your rate; that is guidance, not an entitlement.
What you really give up by staying is choice. One lender has one credit policy, one product range and one view of your file. If that view has not kept pace with how your business has grown, staying keeps you inside it. Working out whether switching pays walks through the sums for self-employed borrowers, and if you want funds without disturbing a loan that still suits you, keeping your first loan and adding a second is worth comparing. Owners weighing an expiring interest-only period on a commercial loan face the commercial version of this decision.
How do I work out whether changing lenders is actually worth it?
Use the same loan balance and the same remaining term, then compare the total cost of moving with the monthly saving. A simple break-even calculation is total switching costs divided by monthly saving. If moving costs $1,800 and saves $150 a month on the same remaining term, the simple break-even point is 12 months. A lower repayment is not automatically a saving if the new loan quietly restarts a longer term.
| Check | What to compare | Why it matters |
|---|---|---|
| Loan balance | Use the same amount unless you deliberately want cash out | Stops extra borrowing being mistaken for a refinance saving |
| Remaining term | Match the years left on your current loan | A fresh 30-year term can make repayments look cheaper while increasing lifetime interest |
| One-off costs | Break cost, discharge, application, registration and any new LMI | These are what the monthly saving has to recover |
| Cashback or switching incentive | Count it only if you meet the offer's eligibility and payment conditions, and check whether any repayment or clawback condition applies | An incentive can reduce the move cost, but it should not hide a weaker rate, longer term or more expensive loan |
| Features | Offset, redraw, splits, package fees and business-linked accounts | A lower rate can be poor value if you lose a feature you use heavily |
| Break-even | Total switching costs divided by monthly saving | Shows how long you must keep the new loan before the simple saving overtakes the move cost |
The example is arithmetic only, not a rate or fee quote. Moneysmart's mortgage switching calculator can test the same idea using your own loan details.
Staying usually wins when
- The loan still fits
- You would pay LMI again elsewhere
- Fixed break costs are high
- You only need a rate review
- Linked facilities or crossed securities would make a move slow
Moving usually wins when
- Your lender will not offer the structure you need
- You need features it does not have
- You are increasing the loan and will be assessed anyway
- Your circumstances now suit a different lender's policy
What we see in practice (indicative, general information, not a quote or an offer). As of September 2026.
- A current lender will often reprice a clean, well-run loan without new paperwork, but asking for more money usually reopens the whole file.
- Self-employed borrowers moving lenders are most often slowed by the new lender re-reading income from scratch, not by the rate.
- The features most often forgotten in a move are the ones built up over years: offset balances tied to business cash flow, split loans and line-of-credit limits.
- Where arrears or hardship sit on the record, the practical first step is usually a conversation with the current lender.
Every lender's policy differs and changes. Nothing here is a rate you will get, an approval likelihood or a saving.
What should you ask your current lender before you decide?
Before you compare, ask your current lender five things: the rate it will offer on your existing loan, whether the change you want triggers a reassessment, the switching fee, a written break cost figure if you are on a fixed rate, and what it charges to discharge the loan if you leave. Those answers are the true cost of staying, and they are the figures any new lender or broker will need to measure an offer against.
- What rate will you offer on my existing loan? Moneysmart suggests telling your lender you plan to switch to a cheaper loan elsewhere, because it may reduce your rate to keep your business. It also notes that having at least 20% equity gives you more to bargain with, and that a good credit score helps.
- Does what I want count as a material change? If you want to move between fixed and variable, go interest-only, extend the term or borrow more, ask whether you will be reassessed and what income evidence the lender will need.
- What fee applies if I stay and switch products? Moneysmart lists a switching fee for refinancing internally; the amount is set by the lender.
- If I am on a fixed rate, what is the break cost? Ask for the figure in writing with the date it was calculated, because break costs move with market rates.
- If I leave, what is the discharge fee, and is any LMI refundable? Moneysmart suggests asking for a refund of some of the LMI on your current loan if you switch.
What if my current lender makes a retention offer after I start refinancing?
Your current lender may make a better pricing offer after you say you intend to leave or after the discharge process starts. Compare that retention offer with the external loan on the same balance, remaining term, fees and features rather than comparing rate alone. Moneysmart recommends asking your lender for a better deal and comparing any offer with the other loans you are considering.
If you have already applied elsewhere, signed loan documents, paid for a valuation or submitted a discharge authority, do not assume that changing your mind is cost-free or automatic. Ask the incoming lender what can still be cancelled and what costs have already been incurred, and ask the outgoing lender whether the discharge request can still be stopped. The MFAA has specifically criticised retention activity that only begins after a discharge form is lodged and has called for lenders to put their best repricing offer forward earlier.
Write the answers down with the date and keep your latest loan statement beside them: it shows the rate, balance, remaining term and any fixed-rate expiry, which is the first thing anyone comparing your options will ask for. Then compare those answers with the point at which switching actually pays for a self-employed borrower. With a short list of alternatives in hand, Moneysmart's mortgage switching calculator shows whether a switch saves money and how long it takes to recover the costs.
Sources: ASIC Moneysmart, Switching home loans, last updated 29 July 2026, read 25 September 2026. MFAA, The home loan discharge process must be improved, 10 April 2024, read 25 September 2026. APRA, APG 223 Residential Mortgage Lending, 19 June 2025, read 25 September 2026.
How are self-employed and alt doc borrowers treated when they stay or move?
Your current lender already holds your repayment history; a new lender reads your income from scratch under its own policy. That cuts both ways. A lender that has watched you meet repayments for years has evidence no new lender can see directly, but it also assesses you under the policy it wrote for your loan, which may be a low doc policy you have since outgrown. For the income side of either route, see how lenders assess self-employed income.
Does switching your rate type count as a change?
Yes, it can. APRA's guidance for banks lists moving from a fixed rate to a floating rate, or the reverse, as a material change that calls for a new serviceability assessment, so a same-lender rate-type switch is not automatically paperwork-free, even though it can feel like a simple product change. This is residential guidance for banks (ADIs), and practice varies by lender: some treat the switch lightly and some ask for current income evidence. If your figures have moved since the loan was written, ask what the lender will need before you request the switch.
What documents will each route ask for?
A plain reprice usually needs no new documents, while a new lender typically asks for recent loan statements and income evidence under its own policy: tax returns and notices of assessment for a full doc loan, or BAS, business bank statements or an accountant's letter for an alt doc loan. APRA's guidance for banks lists the same evidence for verifying a self-employed borrower's income: written advice from an accountant or tax adviser, tax returns and notices of assessment, bank statements, business activity statements and a credit history check. The table sets out what each route typically asks for; each lender's policy differs.
| Evidence | Stay and reprice | Same-lender change or increase | New lender, full doc | New lender, alt doc |
|---|---|---|---|---|
| Recent statements for the current loan | Not usually needed | Not usually needed; the lender already holds them | Usually requested | Usually requested |
| Tax returns and ATO notices of assessment | Not usually needed | Often requested for a material change or an increase | Usually the main income evidence | Not always required; depends on the lender |
| BAS or business bank statements | Not usually needed | Sometimes requested | Sometimes requested to support recent trading | Commonly used as the main income evidence |
| Accountant's letter or income declaration | Not usually needed | Sometimes requested | Sometimes requested | Common, depending on the lender |
| Details of any ATO debt or payment plan | Not usually asked | Likely to be asked | Likely to be asked | Likely to be asked |
General information. Evidence requirements are set by each lender's credit policy and change over time. If you have ATO debt, see how lenders treat ATO tax debt and what lenders check on a self-employed borrower.
Sources: APRA, APG 223 Residential Mortgage Lending, 19 June 2025, read 25 September 2026.
From low doc to full doc. Low doc and alt doc borrowers often reach a point where their tax returns are lodged and a full doc loan becomes possible. That is usually an external move, because the lender that wrote the specialist loan may not price a full doc file the way a bank would; the process is an alt doc refinance. APRA's guidance for banks says it is not good practice to lend on limited income verification where full verification is reasonably available, and that banks address alt doc risk through pricing and significantly lower LVRs, which is why lodged tax returns usually change what a bank will offer. Going the other way, one doc home loans and refinancing into a one doc loan suit borrowers whose financials do not yet show what the business now earns.
After a decline. Borrowers who have been turned down are in a different position again. The route after a bank decline usually runs through a lender whose policy fits the file, rather than back to the one that declined it. The same thinking applies to refinancing after a business property purchase, where new business debt changes what either lender will see.
Consumer or business purpose. A home loan taken by individuals over a residential property is usually covered by consumer credit law, with responsible lending obligations on the lender. A loan taken for business purposes may not be, and the lender's own policy then does more of the work in deciding what it re-checks when you stay or arrive.
What happens after you choose a route?
If you stay, your lender decides whether your request is a simple reprice or a change that needs reassessment, then issues new rate or loan documents. If you move, the new lender assesses your application and values the property, you authorise your current lender to discharge the loan, and settlement pays out the old loan and registers the new mortgage. The part borrowers often miss is what comes after settlement: checking the new offset is linked, moving salary and direct debits, confirming the old loan is closed and checking the first repayment.
How long does an internal refinance take compared with changing lenders?
A simple reprice can be much quicker because there may be no new valuation, credit application or settlement. A same-lender change takes longer if it needs assessment or new loan accounts. An external refinance normally has the most moving parts because the new lender must assess the file, value the property and coordinate discharge and settlement with the old lender. There is no single reliable timeframe for every lender, so treat quoted timing as case-specific rather than guaranteed.
Conditional approval is not settlement. A refinance can still be subject to conditions such as a satisfactory valuation, updated income evidence, confirmation that another debt will be closed or other verification before the lender finalises the loan. Read the conditions instead of treating the first approval message as the finish line.
Staying: what the steps look like
- Make the request. Ask for the reprice or product switch, with the answers from the questions above in hand.
- The lender classifies it. A plain reprice is usually processed without new paperwork; a material change or an increase can go to assessment.
- Provide evidence if asked. For a change or an increase, expect current income evidence and, if the limit rises, potentially a valuation.
- Check the documents. Confirm the new rate, rate type, repayment type, remaining term and whether new loan or offset account numbers will be created.
- Check the offset after the change. ASIC's review found some offset accounts were not properly linked to the loan, and a product switch can change account numbers and links. Confirm the offset is linked to the correct loan and that the interest benefit is actually being applied.
Moving: what the steps look like
- Match your file to a lender's policy before applying. A credit provider's request for your consumer credit report in connection with an application is recorded as a credit enquiry, so avoid applying to lenders that do not fit your file.
- Apply. The new lender assesses your income, liabilities and repayment history under its own policy.
- Valuation. The new lender orders its own valuation, which sets the loan-to-value ratio used for that application.
- Approval and loan documents. Check the rate, fees, loan amount, every outstanding condition and, in particular, the remaining term you asked to preserve.
- Discharge authority. You give your current lender instructions to discharge the mortgage. Lenders may require details for all borrowers, guarantors and secured facilities, so crossed securities or business facilities can add work.
- Settlement. The new lender pays out the old loan and the old mortgage is discharged. Any settlement shortfall or surplus is handled under your instructions.
- After settlement. Check the first repayment date and amount, confirm the old loan has closed, link the new offset correctly, move salary credits and direct debits, and update any business sweeps or automatic transfers that pointed at the old accounts.
Discharge processing can hold up settlement. Approval by the new lender does not make the old mortgage disappear automatically: the outgoing lender still has to process the discharge and coordinate settlement. MFAA research has documented wide variation and delays in Australian discharge processing, so submit the discharge authority when the refinance is sufficiently progressed and ask what is still outstanding rather than assuming an approved loan can settle immediately.
What happens to my offset, redraw and direct debits when I refinance?
An offset account does not automatically follow a loan. Depending on the lender and type of change, an old offset may close, become an ordinary transaction account or need to be linked to a new loan account. Some lenders open new home-loan and offset accounts on an internal refinance, and an existing offset may be converted or closed depending on the facility. ASIC's 2026 review of eight banks found some offset accounts were not properly linked to the loan, leaving customers paying more interest than they should, and ASIC urges borrowers to check their offset is linked and working. That check matters most after a refinance or product switch, when account numbers and links can change.
Redraw is different from an offset: redraw is extra money already paid into the loan and access depends on the loan terms. Before settlement, ask how any available redraw will be treated and whether access stops before discharge. Also make a list of salary credits, direct debits, subscriptions and business cash sweeps tied to the old transaction or offset account so they can be moved deliberately rather than discovered after a failed payment.
Also confirm the account mechanics. An internal refinance or external move can create new loan or offset account numbers, and the treatment of debit cards depends on the lender and account being replaced. If your mortgage has several splits, ask which splits will be recreated, consolidated or closed and which offset account will be linked to each eligible split. Your loan offer and settlement confirmation should set out any new account numbers, offset linkage and loan structure; if they do not, ask before settlement.
What if the valuation comes in lower than expected?
A lower valuation raises your loan-to-value ratio on the same loan amount, which can mean lenders mortgage insurance, a smaller loan or a different lender. Moneysmart notes that LMI may apply when you switch with less than 20% equity, so if your equity is close to that line, a reprice with your current lender, which usually needs no new valuation, may be the safer first step. See how a valuation and cash out change the LVR.
Will the new loan quietly reset your term?
It can. Moneysmart warns that unless you are firm on the length you want, you could end up with a longer term than the years left on your current loan, which lowers repayments but increases the interest you pay over the life of the loan. Ask for a term that matches what you have left, and compare repayments on that basis.
What should I check in the first week after refinance settlement?
Check five things: the old loan has actually closed, the new balance matches the settlement statement, the first repayment date and amount are correct, the offset is linked to the right loan, and all salary credits, direct debits and business sweeps now point to the right accounts. Keep the old lender's closing statement and the new lender's settlement confirmation together, especially if there was a shortfall, surplus, fixed-rate break cost or cash-out amount.
Sources: ASIC Moneysmart, Switching home loans, last updated 29 July 2026, read 25 September 2026. ASIC, Check your mortgage offset account is actually saving you money, 2026, read 25 September 2026. NAB, Refinance your home loan: a guide to settlement, read 25 September 2026. Macquarie, Understanding internal refinances, read 25 September 2026. MFAA, Towards a faster, smoother home loan discharge: benefits for borrowers, March 2024, read 25 September 2026. OAIC, Information on your credit report, updated 29 July 2025, read 25 September 2026.
When is only one route realistic?
Sometimes the choice is made for you. Some situations narrow the field before price comes into it, and the table sets out the common ones.
| Situation | Why it narrows the choice | Route that usually works |
|---|---|---|
| Properties cross-collateralised with one lender | Moving one loan needs that lender to release its security | Staying, or a coordinated partial discharge and standalone refinance |
| Past arrears or a hardship arrangement | New lenders read recent conduct closely | Talk to your current lender first; specialist lenders assess case by case |
| Increasing the loan or taking cash out | You will be assessed either way, and the LVR is recalculated | Either; compare the whole offer, not only the rate |
| Moving the loan into a company or trust | It is a new borrower, so it is a new application at any lender | Either; both mean full assessment |
| Leaving a non-bank or private loan | The exit is the reason for the refinance | External, once the file suits a lower-cost lender |
General information, not a prediction of any lender's decision.
Sources: APRA, APG 223 Residential Mortgage Lending, 19 June 2025, read 25 September 2026. ASIC Moneysmart, Problems paying your mortgage, last updated 9 September 2026, read 25 September 2026.
Crossed securities. Where one lender holds two or more properties as security for its loans, cross-collateralisation means moving one loan needs that lender to release its security first. The lender is not obliged to make that quick, so the move is a negotiation as much as an application.
More money either way. An increase is assessed wherever you take it. Consolidating debts into a refinance is an increase by another name, and where your own lender caps what it will lend against the property, the question becomes when only a new lender will release the equity.
A new borrower. Moving a loan from personal names into a company or trust creates a new borrower, so even a same-lender refinance is a full application.
Arrears or hardship. Where arrears or a hardship arrangement sit on the file, start with your current lender. Moneysmart says to contact your lender's hardship officer, and your lender must write to you within 21 days with the outcome of a hardship request. That applies to consumer credit; business-purpose loans may differ.
When staying stops being an option. Some borrowers find the decision has already been made at their end: if you have been declined by a bank you have been with for years, the route is external by default. The same is true when the reason for refinancing is leaving a private loan, because the whole point is to move once the file suits a lower-cost lender.
If you only want a lower rate, start with a reprice. If you need a different structure, more money or a different credit policy, compare a same-lender refinance with moving. Keep the balance and remaining term comparable, add every switching cost and any new LMI, and work out how long the saving takes to recover the move cost.
Key takeaway: the decision does not finish at approval. After any product switch or refinance, confirm the loan term, first repayment and offset linkage, and make sure the old loan and old payment instructions are actually closed out.Have your latest loan statement and your current lender's answers to the five questions above ready; they are what the comparison starts from.
Frequently Asked Questions
An internal refinance is a new or materially changed loan with the lender you already have, such as a product switch, a change of rate type or a higher limit. A plain lower rate on the same loan is usually a reprice, and the official lending statistics only count an internal refinance when the loan is replaced or increased.
Yes. Your current lender may be able to reprice the existing loan, transfer you to another product or complete an internal refinance. The important question is what changes to the loan, because a material change or higher limit can still trigger reassessment.
An internal refinance stays with your current lender; an external refinance moves the debt to a different lender that pays out the old loan. Staying usually has less friction, while moving gives you a wider choice of products and credit policies but normally means a new application, valuation, discharge and settlement.
Yes. ABS figures show owner-occupier internal refinances rose from 24,992 in the June quarter 2023 to 43,848 in the June quarter 2026, while external refinances fell from 81,401 to 66,449. The ABS only counts an internal refinance when the loan is replaced or increased, so plain reprices are not included.
Not in the official lending statistics. A plain rate reduction on the same loan is usually a reprice. Lenders and consumer guidance sometimes use internal refinance more broadly, so ask exactly whether the lender is changing the existing loan, opening a new facility or only changing the rate.
Ask what rate it will offer on your existing loan, whether the change you want triggers a reassessment, what switching fee applies and, if you are on a fixed rate, the break cost in writing. Moneysmart suggests telling your lender you plan to switch to a cheaper loan elsewhere, because it may reduce your rate to keep your business.
Not usually for a plain rate cut with nothing else changing, but a bank is expected to reassess material residential-loan changes such as changing repayment type, moving between fixed and variable, extending the term or materially increasing exposure. Non-bank policy varies.
Moneysmart lists a switching fee for refinancing internally, and the amount is set by each lender. Moving usually means a discharge fee on the old loan, an application fee on the new one and break costs if you leave a fixed rate, so ask each lender for its figures before you compare.
It depends on your loan: the RBA measured the average gap between existing and new variable home loan rates at just 4 basis points in May 2026, so compare the whole cost, not the headline rate. That figure covers aggregate variable housing rates only, individual loans vary, it says nothing about commercial, non-bank or specialist loans, and it is not a rate you will get.
Compare the same balance and remaining term, then add the one-off costs of moving and divide those costs by the monthly saving. That gives a simple break-even period. Also include any new LMI and the value of features such as an offset account, because a lower repayment is not automatically a lower total cost if the new term is longer.
A simple reprice can be much quicker because it may not need a new valuation, credit application or settlement. A same-lender change takes longer if it needs assessment or new accounts, while an external refinance normally has the most steps because two lenders must coordinate approval, discharge and settlement. Exact timing is lender and file specific.
It depends on the route. A plain reprice usually needs little or no new income evidence. A same-lender material change can require current figures, while a new lender assesses income under its own policy using evidence such as tax returns and notices of assessment for full doc, or BAS, business bank statements or an accountant's letter for some alt doc loans.
Lenders mortgage insurance cannot be transferred to a new lender. If the new loan requires LMI, a new premium can apply even if you paid LMI on the old loan. Whether it is required depends on the new lender's valuation, loan amount and policy.
A lower valuation increases the loan-to-value ratio on the same loan amount. That can reduce how much the new lender will lend, trigger LMI or make a different lender or a same-lender reprice more practical.
Do not assume the offset will keep working automatically. A refinance or product switch can create new accounts or break the link between the offset and the mortgage. After the change, confirm the offset is linked to the correct loan and that the interest benefit is actually being applied.
It can be harder, and the usual first step is your current lender's hardship team, which must write to you with its decision within 21 days. Specialist lenders assess recent conduct case by case, and business-purpose loans may be treated differently.
It can. A new lender may offer a fresh term that is longer than the years left on your current loan. That can reduce the monthly repayment while increasing total interest, so ask for a term that matches the remaining term when you compare offers.
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