The short answer

Yes, often – but not for the reason most people expect. Refinancing isn’t about waiting for rates to be low. It’s about whether your current loan is still the right loan for your current situation. Those are different questions, and the second one has a useful answer right now regardless of where the RBA’s cash rate sits.

Why people think they should wait

There’s a tidy piece of logic that goes: rates went up, so this is a bad time to refinance. I’ll wait until they come down.

It sounds right. It isn’t, quite.

Here’s the problem with that reasoning. If rates were, say, 5.8% across the board, waiting for them to fall to 4.5% before refinancing would make sense you’d be moving to a better number whenever you moved. But the Australian mortgage market isn’t a single flat number. Right now, in mid-2026, the gap between what existing customers on variable rates are paying and what lenders are actively offering new borrowers is often 0.5 to 1.0 percentage points. Which means a homeowner who’s been with the same bank for five years might be paying 6.4% on their loan while that same bank is advertising 5.6% to new applicants.

Waiting for the market to fall doesn’t fix that gap. Only moving fixes that gap.

The loyalty tax, in plain terms

Banks price new business more competitively than they maintain existing loans. This is just how mortgage pricing works. Lenders offer sharp rates to win customers, and over time, as the market moves and that customer doesn’t, their rate drifts above the competitive range.

The longer a loan’s been untouched, the bigger that drift tends to be. Someone who last looked at their home loan in 2020, when rates hit record lows and refinancing activity exploded, has had six years of slow drift since. Someone who fixed in 2021 and just rolled off their fixed term in 2024 or 2025 almost certainly rolled onto a variable rate that was set at the bank’s discretion, not negotiated fresh.

Both of those borrowers are candidates for a conversation, regardless of which way rates go next.

Running the numbers for a typical Lismore homeowner

Take a homeowner in Lismore with $420,000 remaining on their mortgage. If they’re currently paying 6.4% on a variable rate and can refinance to 5.75% – a realistic spread given what lenders are currently offering – here’s what that looks like:

At 6.4%, monthly repayments on $420,000 over 25 years are approximately $2,850.
At 5.75%, the same loan costs approximately $2,660 per month.
The saving is around $190 a month, or $2,280 a year.

Against that, refinancing costs – discharge fees from the current lender, application and settlement fees with the new lender, any legal costs – typically run between $800 and $1,500 for most straightforward variable refinances. Government fees add a little. At $190 a month in savings, those costs are recovered in under ten months.

The point isn’t that 5.75% is an amazing rate by historical standards. It isn’t. The point is that $2,280 a year is a real improvement in household cash flow for a Lismore family that’s felt three rate rises in 2026 – and it’s available without the market doing anything except the borrower asking.

When refinancing is less clear-cut

There are situations where it’s worth slowing down rather than rushing:

Remaining loan term is very short.If you have five years left on your mortgage, the upfront cost of refinancing is harder to justify in savings spread over a shorter horizon.

You have significant break costs on a fixed rate.  Fixed-rate break costs can be substantial and aren’t predictable ahead of time – your existing lender has to calculate them based on current wholesale rates. Always confirm this number before assuming a fixed-rate refinance makes sense.

Your income or financial position has changed significantly since you first applied. Lenders will reassess serviceability from scratch. If you’ve gone from PAYG employment to self-employment, or there’s been a change in household income, a new application isn’t just a formality – it’s a fresh assessment.

You’re about to sell. If the property’s being sold within 12 to 18 months, refinancing costs are rarely recovered in time.

The question worth asking this month

Forget the RBA for a moment. When did you last ask your lender what rate they’d offer you if you applied today as a new customer? If the answer is more than two years ago, or never, that’s the only number that tells you whether refinancing is worth it for your loan.

We can pull that comparison for you in about 15 minutes. Not a vague sense of the market – your current rate against what’s actually available to you, including lenders outside the big four.

Frequently asked questions

Is refinancing worth it when interest rates are still relatively high?

Often, yes. The more relevant question is whether the gap between your current rate and what you could get as a new borrower makes the switch worthwhile. That gap exists regardless of the overall rate environment.

How much does it cost to refinance a home loan in Australia?

Typically between $800 and $1,500 in fees for a straightforward variable refinance, including discharge fees from the existing lender and application fees with the new lender. Government title fees vary by state.

How long does it take to break even on refinancing costs?

It depends on the size of the saving, but for most Northern Rivers homeowners comparing within a realistic rate range, costs are typically recovered within 6 to 12 months of monthly repayment savings.

Can I refinance if I’m self-employed?

Yes, though the application assessment is different. Lenders will look at two years of tax returns and financials to confirm income, and some lenders are more comfortable with self-employed borrowers than others. A broker with a wide panel can match you to the lender whose policy actually fits your situation.

What if I’m mid-way through a fixed rate?

Refinancing a fixed rate before the term ends usually involves break costs, which are calculated by your existing lender based on current wholesale rates and can vary significantly. Always confirm the actual break cost before making any decision.

Find out where you actually stand

A Loan Health Check gives you a plain comparison of your current rate against the live market, in your specific situation. No obligation, no guesswork.

This article contains general information only and doesn’t take into account your personal financial situation, needs or objectives. Repayment figures used are illustrative examples only. Speak with a Smik Home Loans broker for advice tailored to your circumstances before making any lending decisions.