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Refinancing / Loan Structure

Refinancing With Less Than 5 Years Left on Your Loan:

Is It Worth It?

If you're close to paying off your home loan, refinancing can feel like unnecessary disruption for a shrinking benefit.


Sometimes that's true. But for the right reason — and the right maths — it can still be worth doing, even this close to the finish line.

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Why the Maths Changes Near the End of a Loan

Refinancing costs — discharge fees, registration fees, any break costs — are largely fixed regardless of your remaining loan term.

But the potential interest savings from a better rate shrink considerably when there's less time and less principal left for that saving to compound against. On a loan with 25 years remaining, a 0.50% rate reduction saves a substantial amount (see how much refinancing can actually save you for the full worked example).

On the same loan with 4 years remaining, the same reduction saves far less in absolute terms — which is why the break-even question matters more here than at any other stage of a loan.

When It Still Makes Sense

  • Accessing equity for investment. If the goal isn't reducing your own repayments but drawing on built-up equity to fund an investment property or business opportunity, the "years remaining" question becomes less relevant — you're refinancing for a different reason entirely.
  • Consolidating higher-interest debt. If you're carrying credit card or personal loan debt at 15–20%, restructuring that onto your near-final home loan (with a matched, accelerated repayment plan) can still be worthwhile even with a short remaining term.
  • A materially better rate with genuinely low switching costs. If your current rate is significantly above market and the new lender's fees are minimal (many waive application and valuation fees for refinances), the break-even point can still arrive within months.

When It Doesn't

If the rate difference is small — a few basis points rather than a meaningful gap — and the loan will be fully repaid within a year or two regardless, the fees and effort of refinancing often aren't worth it.

The same applies if the new lender's fees are on the higher end, or if you're already directing surplus cash flow effectively through an existing offset account.

In these cases, simply continuing as-is, or negotiating directly with your current lender, is usually the more sensible path.

The Question Worth Asking First

Before comparing rates, it's worth being honest about why you're considering refinancing at all: is it to reduce your current repayments, access equity, or consolidate debt?

Each of those has a different break-even calculation, and near the end of a loan term, that distinction determines whether refinancing is worth the paperwork.

Let's Check If It's Even Worth the Conversation

With a short remaining term, it's genuinely worth running the numbers before deciding either way. A quick review can tell you honestly whether refinancing stacks up for your situation.

Read the Full Refinancing Guide
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