What Does It Cost to Refinance a Home Loan? Every Fee, Itemised

Everyone tells you refinancing saves money, and on the rate alone the arithmetic looks obvious. Move to a lower rate, pay less interest, done.

Then you go looking for what the switch actually costs and the published answers fall apart. Depending on whose page you land on, a refinance costs $500, or about $1,000, or closer to $3,000. None of them explain what moves the number that far, which is the only part that matters when you are deciding.

This guide itemises every fee on an owner-occupier refinance: who charges it, roughly what it runs, and which ones you can avoid. It covers the discharge process in detail, because that is where the delay and the confusion sit, and it finishes with the break-even calculation that tells you whether the switch is worth making.

Every cost of refinancing, itemised

There are eight possible line items. Most refinances trigger four or five of them.

Every figure above is indicative. Lender fees vary by lender and change without much notice, and registry fees are set by your state and revised each 1 July. Get your own numbers in writing before you sign anything.

The first three rows are the floor. Whatever else happens, you pay an exit fee to the lender you are leaving and two dealings at the land registry, one to remove the old mortgage from your title and one to put the new one on. Call it $500 to $900 depending on your state and your current lender.

Rows four through six are the negotiable middle. Many lenders waive some or all of them to win refinance business, which is why the same switch costs one person $600 and another $1,400. Rows seven and eight decide whether refinancing makes sense at all, and they get their own sections below.

The discharge fee and the form that controls your timeline

The discharge fee is what your current lender charges to close the loan and release its mortgage over your property. It is administrative. It covers the paperwork, the payout figure, and the lodgement of the discharge at the land registry.

Most Australian lenders charge between $150 and $400. Published comparisons put ANZ near the bottom of that band at around $160, with CommBank, NAB and Westpac closer to $350, though these move, so confirm your own lender’s current figure rather than trusting a number from an article. It appears in your loan contract and in the fee schedule on your lender’s website.

You cannot negotiate it away. It is contractual, it applies whether you refinance or pay the loan out entirely, and the new lender will not absorb it for you.

What a discharge authority form actually is

To start the process you sign a discharge authority form, sometimes called a discharge or refinance authority. It is the instruction that tells your current lender you are leaving, authorises it to prepare a payout figure, and gives it permission to talk to your new lender and your conveyancer.

Nothing happens until that form is lodged. Not the payout calculation, not the title work, not the settlement booking. Every lender has its own version, published on its website under home loan support or forms, and it asks for your loan account numbers, the security property, the reason for discharge, and the contact details of the incoming lender or solicitor.

The most common mistake is filling it in wrong. A missing account number, an unsigned page, or the wrong property listed sends it back to you and the clock restarts.

The 10 to 21 business day window

Once a completed form is received, most Australian lenders quote 10 to 21 business days to process a standard discharge. The major banks generally sit at the shorter end, around 10 to 15 business days. Non-bank and smaller lenders often need the full three weeks.

Read that as calendar time and it is three to five weeks, which surprises people who assumed the new lender’s approval was the finish line. It is not. Your new lender can approve you in days and still be waiting on the outgoing lender to release the title.

Because of that lag, lodge the discharge authority about four weeks before your target settlement date. This window is why refinances that should take a month take two, and it is the part of the process most borrowers never hear about until they are inside it.

Government fees depend on which state you live in

The registry portion of your refinance is not a national number, and anyone quoting one is rounding. Land titles are administered state by state, and each registry sets its own schedule.

You pay for two separate dealings. One removes the outgoing lender’s mortgage from your certificate of title, the other registers the incoming lender’s. Both are lodged electronically, usually through PEXA, and both are passed straight through to you at cost.

As a planning figure, each dealing runs roughly $160 to $250 in most states, so budget $320 to $500 for the pair. For the exact current amount, check your own state’s registry:

• NSW: NSW Land Registry Services fee schedule
• Victoria: Land Use Victoria fees, guides and forms
• Queensland: Titles Queensland fee calculator

Other states publish equivalent schedules through their land titles offices. All of them revise on 1 July, so a figure quoted in an article written last year is already stale.

Break costs: the one number that can kill the deal

Break costs apply only if you are on a fixed rate and you exit before the fixed term ends. On a variable loan they do not exist.

Your lender funded that fixed rate at a wholesale cost locked in for your term. If wholesale rates have since fallen, the lender takes a loss unwinding the position and the break cost recovers it. If rates have risen or held steady, the break cost can be close to zero.

That means break costs are not a fixed fee you can look up. They are a calculation tied to your loan size, your remaining fixed term, and how far rates have moved since you locked in. Depending on those three inputs, the same borrower could be quoted $200 or $12,000.

Ask your lender for a break cost quote in writing before you commit to anything. Do that first, not last. It is the most common reason a refinance that looked obvious on paper turns out not to be, and it costs nothing to find out.

If the quote is large and your fixed term has under a year to run, wait. Line the refinance up to settle shortly after the fixed period ends and the break cost disappears entirely.

LMI does not travel with you

Lenders mortgage insurance protects the lender, not you, and it is charged when your loan is more than 80% of the property’s value. Most people meet it when they buy. Fewer expect it on a refinance.

The LMI policy you paid for on your original loan belongs to your original lender. It does not transfer, and it is generally not refundable. Refinance while your loan is still above 80% of the current valuation and you pay a new premium on top of the one you paid years ago.

Depending on loan size and how far above 80% you sit, that premium can run from a few thousand dollars into the tens of thousands, which is enough to make the entire switch pointless.

This is why the 80% threshold governs so much of the refinancing conversation. Below it, your fee total is the few hundred dollars in the table above. Above it, you are in a different decision, and it hangs on a valuation you do not control. Two things move you under the line: repayments you have already made, and growth in the property’s value since you bought. If a valuation comes back lower than you expected, a broker can order valuations across several lenders, and they do not always land on the same number.

The same 80% line applies if you are borrowing more than your current balance, which is what happens when people refinance to fund a renovation. Adding to the loan can push you back over the threshold and re-trigger LMI on the whole amount, not just the new part. That is its own topic with its own arithmetic. See refinancing for how the borrowing side of it works.

Is refinancing worth it? Run the break-even

Skip the rate comparison for a second. The only question that matters is how long your saving takes to pay back your switching costs, and you get that by dividing your total fees by your annual interest saving.

A hypothetical example, using round numbers. Say you owe $600,000 and move to a rate 0.40 percentage points lower. That reduces your interest cost by roughly $2,400 in the first year. Your switching costs come to $1,100. Divide $1,100 by $2,400 and you break even at about five and a half months. Everything after that is money you keep.

Now add a fixed loan into the same example. If breaking the fixed rate costs $6,000, your total switching cost becomes $7,100, and the break-even stretches from five months to close to three years. Same rate saving, completely different decision.

A break-even under 12 months on a loan you intend to hold for years is a straightforward yes. Past two or three years, you are betting that nothing changes in the meantime, and things usually change.

One adjustment worth making. If you extend your loan term back out to 30 years when you switch, your repayments fall but your total interest over the life of the loan can rise, so compare like with like.

ASIC publishes a mortgage switching calculator on Moneysmart that runs this arithmetic for you, including the term-extension effect. It is the quickest sanity check available and it is not selling you anything.

Which of these fees you can actually avoid

Four of the eight line items are negotiable or avoidable.

• Application and establishment fees. Plenty of lenders waive these on refinance business. If yours will not, that is worth knowing before you pick it, because another lender on a 30+ panel probably will.
• Valuation fees. Frequently waived, and often covered by the incoming lender where the property is straightforward.
• Break costs. Avoidable by timing rather than negotiation. Wait for the fixed term to end.
• LMI. Avoidable by keeping the new loan at or under 80% of the current valuation, whether by waiting, paying down, or borrowing less than you first planned.

Four are not. The discharge fee is contractual, both registry dealings are set by your state, and a settlement fee is usually built into the lender’s product rather than left to discretion.

One more thing costs you without being a fee. If your income is not standard PAYG, the documentation requirements change and so does the list of lenders likely to say yes. Self-employed borrowers should look at how self-employed lending is assessed before they start collecting paperwork, because approaching the wrong lender first is the most expensive kind of delay.

Why every article gives you a different number

No two sources agree on what refinancing costs, and there are three reasons for it.

Scope is the first. Some published figures count only the lender’s fees, others fold in state registry costs, and a few include conveyancing that most straightforward refinances no longer require because the incoming lender’s settlement agent handles it.

Averaging is the second. A national average blends eight state fee schedules and dozens of lender fee structures into one number that describes nobody.

The third is that break costs and LMI, the two largest possible costs, sit outside most published ranges because they apply to some borrowers and not others. Quote $500 to $2,000 and you are describing a refinance where neither applies.

The number you want is not the average. It is the itemised quote for your loan, from your lender, in your state. Every figure on that list is knowable before you apply.

What happens after you switch

Most refinancing guides stop at settlement, which is a strange place to stop for a debt you will hold for decades.

The position you have just fixed starts drifting again immediately. Lenders price new customers more sharply than existing ones, and the gap widens quietly the longer you stay. The Reserve Bank has documented this spread between what established borrowers pay and what new ones are offered. Refinancing once resets it. It does not stop it happening again, and the usual answer to that is a diary reminder, which works about as well as diary reminders ever do.

The Approov model is built around not leaving that job to you. Your file stays open after settlement rather than closing, so a fixed rate approaching expiry or a shift in your equity position are things we are set up to raise with you rather than things you have to catch yourself. A licensed broker stays on the account for the strategy calls. That is a service model rather than a rate promise, and it is worth being clear about which one you are being offered.

The bottom line

For most owner-occupiers, refinancing costs less than the internet suggests. Several hundred dollars in unavoidable fees, often under $1,000 all up, against a saving that repays it inside a year.

Two exceptions are worth checking before you start: a fixed rate with time left on it, and a loan sitting above 80% of what the property is now worth. Both are knowable in an afternoon, and both decide whether the switch pays for itself.

If you want the itemised version for your own loan, book a strategy session. We will pull your current rate, your break cost if you have one, and the fee total across a 30+ lender panel. It takes 15 to 30 minutes, there is no obligation, and you will finish it knowing whether switching is worth your time. If you are weighing that against going straight to your own bank, the broker versus bank comparison covers where each one wins.

Frequently asked questions

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

For a straightforward owner-occupier refinance with no break costs and no lenders mortgage insurance, expect around $600 to $1,500 all up. That covers your current lender’s discharge fee, two land registry dealings, and whatever application, valuation or settlement fees the incoming lender charges. The range is wide because lender fees vary and registry fees are set by your state.

What is a mortgage discharge fee?

It is what your current lender charges to close your loan and release its mortgage over your property. Most Australian lenders charge between $150 and $400, and the amount is set out in your loan contract. It is separate from the government fee to register the discharge on your title.

Do I have to pay a mortgage discharge fee?

Yes, if your loan contract specifies one, and almost all do. It is contractual rather than promotional, so a new lender will not waive it on your behalf. Confirm the exact figure with your current lender early, so it goes into your break-even calculation rather than surprising you at settlement.

What is a discharge authority form and how long does it take?

It is the form that instructs your current lender to release your mortgage and start the payout process, and nothing moves until it is lodged. Most lenders quote 10 to 21 business days to process one, with the major banks at the shorter end and smaller lenders at the longer end. That is three to five weeks of calendar time, so lodge it about four weeks ahead of your target settlement.

Is refinancing worth it for a 1% rate difference?

On most owner-occupier loan sizes, yes. On a $500,000 balance, one percentage point is roughly $5,000 a year in interest against switching costs usually under $1,500, so the break-even lands inside a few months. The answer changes if you are breaking a fixed rate or triggering a new lenders mortgage insurance premium, which is why both need checking before the rate comparison.

Can I refinance with no fees at all?

Not entirely. Application, valuation and settlement fees are commonly waived by lenders competing for refinance business, so those can reach zero. The discharge fee and the two state registry fees cannot. A refinance advertised as having no fees usually means the new lender is charging you nothing, which is not the same as the switch costing you nothing.

What is the downside of refinancing?

Three real ones. Extending your loan term back out to 30 years lowers your repayments but can increase the total interest you pay over the life of the loan. If your equity has fallen below 20%, a new insurance premium can outweigh the rate saving. And the process takes weeks rather than days, mostly because of the discharge window at your outgoing lender. None of these are reasons not to refinance. They are reasons to check the numbers first.

Are refinancing costs tax deductible?

On the home you live in, generally no. Borrowing costs associated with an owner-occupied loan are not deductible in the way that costs against an income-producing property can be. If any part of your borrowing has an investment purpose, the treatment differs and depends on how the loan is structured and what the funds were used for. That is a question for your accountant, not your broker.