Will you be refinancing your mortgage in 2025? You are not alone. As interest rates fluctuate, household budgets shift, and new lending products become available, many Australians are considering refinancing to better their financial situation.

 

But refinancing isn’t just about pursuing a lower rate. It is finding the right loan for how you want to live and where you want to be. Whether you are looking to lower repayments, release equity for renovations or lock in more flexible features, it all comes down to being well-positioned.

 

This checklist will walk you through it, making decisions you don't feel overwhelmed or lost or confused on this day. Refinancing should provide you with clarity and confidence.” At OM Financials, that’s what we truly believe in. 

 

Here’s a straightforward, step-by-step guide to help you learn, prepare for and confidently navigate the refinancing process.

 

Knowing Why You Are Refinancing

 

Before you begin weighing interest rates or calling lenders, make sure you know why you want to refinance. This would set the tone for everything that comes next.

Are you looking to lower your monthly payment? Looking to consolidate debt? Going from an adjustable to a fixed rate (or back)?

Or perhaps you are tapping equity to renovate or invest in a second home.

 

Each goal has its course, and knowing yours ahead of time will help you find the loan product that’s right for you without getting sidetracked. For instance, if you are refinancing to access an offset account, focus on the features, not solely on the rate. If you’re looking for lower repayments, consider the total loan costs, including fees.

 

Assessing Your Existing Loan and Expenses

 

One of the most common mistakes that many homeowners make is to jump at a new offer without knowing the actual cost of exiting their existing home loan. Begin by looking at your current loan specifics:

 

• Interest rate: (and whether fixed or variable)

 

• Remaining loan term

 

• Monthly repayment amount

 

• Existing loan product (e.g. offset account, redraw facility)

 

• Exit or break fees

 

If you’re on a fixed-rate loan, there may be break costs sometimes hundreds or thousands of dollars. You could call your lender and request a break fee estimate. Knowing this allows you to conduct a sane cost-benefit analysis.

 

Understand Your Home's Current Value in the Market

 

Lenders will also do a valuation on your property before they finalise a refinance. So it’s good to have some rough sense of where your property values itself in today’s market.

 

The more your property is worth, the more equity you have – and the more you might extract from it:

 

• A better interest rate

 

• LMI exemption from lenders

 

• Liquid access from an equity release

 

Conversely, if prices have fallen in your suburb, your loan-to-value ratio (LVR) could shoot skyward, in turn leading to LMI payouts or a reduction of refinancing opportunities. Before applying, a market appraisal or advice from a local real estate expert can be a good idea.

 

Assemble Your Financial Picture

 

Lenders are clamping down on your ability to repay the loan in 2025. That means the amount you earn and spend, the debts you already owe and your employment history are all being closely evaluated. Having a healthy financial track record not only increases your probability of approval, but also to find a more competitive rate.

 

Here’s what you should check:

 

• Is your credit score healthy? (Above 700 is ideal)

 

• Are your debts under control? (Lower your credit card balances and personal loans if you can.)

 

• Do you have stable income?

 

• Discretionary spending – have you cut it to the minimum?

 

It’s also key to have all necessary paperwork lined up early. This includes:

 

• Recent payslips

 

• Tax returns

 

• Statements from your loans and credit cards

 

• Identification documents

 

Proof of savings

 

Sorting these out early also speeds up the application process and makes you feel more confident when you are in discussions with lenders or brokers.

 

Shopping for Loans: Rates Aren’t Everything

 

Interest rates matter — but they are not the entire tale. It is for this reason that many borrowers move to a new lender after seeing a low rate, only to discover that fees, lack of flexibility or missing features made it a bad decision.

 

Instead, compare:

 

• Comparison rates (which include most fees)

 

• Ongoing fees and charges

 

• Offset and redraw facilities.

 

• Extra repayment flexibility

 

• Fixed vs. variable options

 

• Customer support and online tools

 

Use independent comparison websites or a mortgage broker to compare the total cost and benefits of each loan. And don’t overlook the allure of introductory offers some might seem appealing now, but go up later.

 

Counting the Costs of Refinancing

 

Refinancing may not be free. Know exactly what the costs will be before committing to a plan and budget for them.

 

Typical costs include:

 

• Loan origination fee (1%–7% of loan amount)

 

• Your current lender’s discharge fee ($150–$400)

 

• Property valuation fees

 

• Settlement and legal fees

 

• (Mortgage) Insurance (if loan-to-value ratio > 80%)

 

To determine whether refinancing makes sense, calculate the break-even point — the point in time it will take for your savings from lower repayments to be greater than the costs to refinance. If you’re going to sell or move within that time frame, refinancing may not be worth it.

 

Thinking About Cash-Out Refinancing? Get Pre-Approval

 

If you expect to tap into that equity, whether to pay for a renovation, an investment property or a personal endeavour, you might wish to apply for pre-approval.

 

Pre-approval gives you:

 

• Understanding how much equity you can access

 

• Time to plan your next steps

 

• Security in financial commitments

 

Just remember: With equity access comes responsibility. You’re borrowing against your house, so be careful and have a repayment plan in place.

 

What will mortgage brokers look like in 2025

 

Refinancing can be overwhelming in this environment, and you may not want to have to figure it out on your own when there are so many different lenders, policy changes and product offerings in the market. That’s when you may find a mortgage broker comes in handy.

 

A good broker will:

 

• Compare multiple loan options.

 

• Translate jargon into normal language.

 

• Assistance with paperwork and negotiation

 

Figure out which lenders are perfect for your situation (self-employed, low debt, oc etc)

 

And best of all, since most brokers are compensated by the lender, their service doesn’t cost you anything beyond the loan itself.

 

Timing Your Refinance in 2025

 

When it comes to refinancing, timing is everything. Stay tuned to the market and watch out for:

 

Interest rates: Will they fall or rise?

 

Cashback offers: Lenders are providing offers ranging between $2,000 and $4,000 in 2025

 

Homeowners trend: If your property value is on the rise, refinancing may bear fruit

 

Post-Refinance To-Do List : Don’t forget the post-refinance to-do list

 

Once the refinance is done, the job isn’t finished. Here’s what to do next:

 

Make sure you understand your new payment plan.

 

• Set up automatic payments.

 

• Forgo your old lender’s direct debits and online access

 

• Maintain records for tax and record-keeping purposes.

 

Also, take a look at your loan annually. And don’t get too comfortable  keeping close watch over your home loan can save you thousands in the long run.

Refinancing can be a sound financial decision if approached with caution and custom-fit to suit your needs. It has the potential to reduce your monthly repayments, offer better loan features and access new financial opportunities. But like any significant decision, it calls for thoughtful planning and the right support.

At OM Financials, we'll convert your preparation into tangible outcomes. From rate comparison between lenders to managing all of the paperwork, our refinance experts will make the process streamlined and stress-free.

Schedule your free refinance consultation or phone us now on 0478 876 967 to book your strategy call.