refinancing a loan

There are no rules about how often you should refinance your home loan. It's entirely up to you and depends on when you think the time is right. 

Most people explore mortgage refinancing every 3 to 4 years, even with a variable interest rate. You will hopefully have lowered your loan balance and seen your property's value rise during that period.

It's important to remember that refinancing comes with costs. These can include application fees, valuation, and break costs (if you switch from one loan to another). As such, you need to ensure that the benefits of refinancing outweigh the costs.

Most borrowers will begin to experience benefits from their switch within a matter of months. However, refinancing fees should be considered when determining how frequently you should refinance your home loan.

When Do You Refinance Your Home Loan?

Many situations call for refinancing. As you transfer jobs, have kids, and experience financial gains and losses, your circumstances will continually shift and evolve, hopefully for the better. These situations can drive you to evaluate your significant financial commitments, including your home loan.

Here is a simple guide to help you catch opportune times to refinance your home loan:

1. To Consolidate Debts

Debt consolidation is one of the most popular reasons to refinance a home loan. If you currently have high-interest debt, such as credit card debt, car loans, or other loans, consolidating that debt into your home loan can save money on interest and help you pay off your debt faster.

Consider a few things before you refinance your home loan to consolidate debt. First, you must ensure that your home equity is high enough to cover the debt you want to consolidate. In addition, you must make sure you can afford the new monthly payment before you decide to refinance. 

Lastly, have a good reason to consolidate your debt. Consolidating your debt can save you money on interest, but it won't make it go away. You'll still need to make monthly payments; if you miss a payment, you could lose your home. Make sure you're ready to commit before you decide to refinance your home loan to consolidate debt.

2. When a Fixed-Term Loan Ends

When your fixed-term home loan ends, you may wonder whether now is the right time to refinance. Before refinancing, look closely at your current financial situation to see if you're in a good position to afford the new loan. Consider your income, debts, and other financial obligations.

Defined-term loans have a lower rate during the fixed time and revert to a higher variable rate, increasing monthly payments. Refinance based on market conditions and cash rate decreases. 

The Reserve Bank dropped the cash rate by 125 basis points last year to 0.25 per cent, making the house credit market more competitive. That was a great time to lock in a low fixed interest rate, So, if your mortgage fixed interest rate is about to expire or is already expired and it isn't competitive any more, it's an excellent time to refinance.

3. When You Need to Adjust Your Financial Goals

Always think about your financial goals when deciding whether to refinance your home loan.

For instance, if you're planning to stay in your home for a long time, it may make sense to refinance into a loan with a lower interest rate. On the other hand, refinancing may not be the best option if you're thinking of selling your home soon. 

On the contrary, if you want to lower your monthly payments, consider refinancing with a lower interest rate.

Refinancing your mortgage may not always be the right move, so be sure to consider all the factors mentioned before making a decision.


These are just a few things to consider when refinancing your home loan is right for you. Every person's situation is different, so it's important to talk to a financial advisor to see if refinancing is a good option for you.

If you need to refinance your home loan, you must work with a company you can trust, like Wealthy You. We simplify refinancing with our flexible and cheap financing solutions, letting you access up to 85 per cent of your home's equity. We simply offer the best home loans in Sydney, so contact our team today!