Refinancing isn't free, but the fees are usually smaller than people expect — and smaller than the amount most established homeowners can save by getting their loan structured properly.
Here's exactly what you're likely to pay, and the one question that actually matters more than any of it.
Most refinance costs fall into two categories: what your current lender charges you to leave, and what your new lender charges you to join.
Neither is usually large enough on its own to make refinancing not worth it — but they add up, and it's worth knowing them before you compare rates.
All up, most straightforward refinances land somewhere between $800 and $1,200 in direct costs if you're not breaking a fixed rate and not triggering LMI. That's the number worth anchoring to.
Fees are a known, one-off number. The real decision is whether the change is worth making at all — and that's not just about the interest rate.
A lower rate with a poorly structured loan can still cost you more over time than a slightly higher rate with the right splits, offset structure, and repayment strategy.
Before comparing costs against savings, it's worth asking three questions:
On a $500,000 loan, moving from a rate that's 0.50% higher than market to a more competitive one saves roughly $2,500 in interest in the first year alone — against total refinance costs that typically sit around $800 to $1,200 when no fixed break or LMI is involved.
The break-even point in most cases is measured in months, not years. The exception is when a fixed-rate break fee or LMI is triggered — which is exactly why it's worth checking those two line items first, before assuming the maths works.
Every loan is different, and the fee estimates above are general ranges — not what you'll necessarily pay.
The only way to know your real break-even point is to look at your current loan, your equity position, and your goals together.
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