Is Refinancing Worth It in 2026? What Australian Borrowers Must Calculate First

For many Australian homeowners, 2026 feels like a pause after several intense years of rising interest rates. If you took out your home loan during the higher-rate period between 2022 and 2024, you may now be wondering whether refinancing is finally worth considering.

As mortgage brokers at OM Financials, we’re seeing more borrowers reassess their loans as the market enters a rate-plateau phase. Rates may not be dropping sharply, but lenders are once again competing for refinance business. That combination has brought refinancing back into the spotlight.

The key question, however, isn’t just can you refinance — it’s whether refinancing makes financial sense for you in 2026.

Why Refinancing Is Gaining Momentum in 2026

We believe refinancing should always be reviewed if a borrower’s loan hasn’t been looked at for several years. It becomes especially important if they’re paying a higher interest rate than what’s currently available in the market. Refinancing can also make sense when a borrower’s financial position has improved, and they may now qualify for a better rate.

At the same time, lenders are adjusting their pricing and offering more competitive loan structures to attract strong refinance applicants. This means borrowers who haven’t reviewed their loan in the last two years may be paying more than they need to.

This shift has made refinancing home loan Australia 2026 a serious decision point, particularly for owner-occupiers and long-term investors.

Start With Your Current Interest Rate

Before you jump onto a refinance calculator or start comparing lenders, the first thing to do is look closely at the rate you’re paying right now. A lot of borrowers assume their loan is still competitive simply because their bank hasn’t contacted them.

In reality, that’s rarely how it works. Banks don’t usually reward loyalty, and we regularly speak with clients who are paying well above current market rates without realising it. Even a small gap in interest rate can quietly cost you thousands of dollars each year on an average home loan.

This is where a proper loan review makes a difference. As mortgage brokers, we don’t rely on one lender’s offer. We compare your current loan against what’s actually available in the wider market, so you can see clearly whether you’re in a strong position or paying more than you should.

Refinancing Is More Than Just Chasing a Lower Rate

One of the biggest mistakes we see is refinancing purely to get a lower interest rate, without stepping back and looking at the full picture. Yes, the rate matters but it’s not the only thing that matters.

Refinancing usually comes with costs, and those costs need to be weighed up properly. Depending on your situation, there may be discharge fees, government fees, or new lender costs involved. If those aren’t factored in, the “savings” on paper may not be as good as they first appear.

A smart refinance looks at how long it will take for the savings to outweigh the costs, and whether the new loan actually suits your goals. Sometimes the best outcome isn’t just a cheaper rate, but a better loan structure that gives you flexibility and long-term benefits.

At OM Financials, we always calculate the break-even point so you know exactly when refinancing starts to work in your favour.

Be Careful of Resetting Your Loan Term

One of the other effects that many lenders do not consider is the impact of resetting their loan term when they refinance. At the same time, many lenders may potentially receive lower monthly repayments due to the new lower rate when they refinance. They are also now paying far more (in total) for that loan compared to what they were paying before they refinanced.

A strategic refinance may involve keeping your remaining loan term or using the lower rate to make extra repayments instead. The right approach depends on your long-term goals, not just your short-term cash flow.

This is where personalised advice matters far more than a generic refinance calculator.

Your Equity Position Matters More Than You Think

Your property’s value has likely changed since you first took out your loan. Refinancing in 2026 may open opportunities if your equity position has improved, such as avoiding lenders mortgage insurance or accessing equity for renovations or investment purposes.

However, equity can work both ways. If your loan-to-value ratio has increased, your refinance options may be more limited. Understanding this clearly before applying can save time, stress, and unnecessary credit checks.

When Refinancing Is Usually Worth It in 2026

In our experience, refinancing is often worth considering when your current loan hasn’t been reviewed for several years, your interest rate is clearly above market, or your financial situation has improved since you first borrowed.

It can also make sense if refinancing allows you to restructure your loan with better features such as an offset account, more flexible repayments, or improved long-term planning.

The goal is not just to save money today, but to set up a loan that supports your future.

When Refinancing May Not Be the Right Move

When considering refinancing, keep in mind that there will be product costs, exit fees, and potentially higher interest rates to pay as a consequence. Therefore, if the amount you plan to spend on refinancing outweighs the potential market value of your property, it may not be worth making this investment. Also, if you have experienced changing financial circumstances since signing your loan contract, you may want to stick with your existing lender rather than refinancing with another lender.

A good mortgage broker will always tell you when refinancing doesn’t make sense. Honest advice is just as important as finding savings.

Why Online Refinance Calculators Have Their Limits

A refinancing calculator can provide an initial starting point; however, a calculator does not give you all the data to make an informed decision. The calculator will not account for lender Policies or procedures.

OM Financials approach provides you with a comprehensive overview of your options. We consider hundreds of lenders, calculate actual savings, and offer you complete explanations, allowing you to confidently make an informed decision.