If you’re a homeowner in Australia looking to access additional funds, you’re likely considering two popular options: a home loan top-up or refinancing your mortgage. Both strategies let you tap into the equity you’ve built in your property, but they work differently, have unique advantages and disadvantages, and suit different financial objectives.
At Stryve Finance, we’re independent mortgage brokers who help Australians navigate these choices and secure competitive lending solutions. Let’s explore which option may be right for you.
What Is a Home Loan Top-Up?
A home loan top-up is a way to borrow extra funds by increasing the amount of your existing home loan. This option allows you to access your available equity without taking out a separate personal loan or refinancing your mortgage. Essentially, you’re adding to your current home loan balance with the same lender.
Top-ups are commonly used for home renovations, medical bills, a new vehicle, or consolidating smaller debts. They’re typically quicker and easier to process than refinancing since you’re staying with the same lender—meaning less paperwork, fewer fees, and faster access to funds. However, your lender will still assess your current income, expenses, and overall ability to repay the increased loan amount.
What Is Refinancing a Home Loan?
Refinancing your home loan involves replacing your current mortgage with a new one, either from your existing lender or a different lender altogether. Homeowners often refinance to take advantage of better interest rates, more flexible loan features, or to access additional equity for large expenses or investments.
This process provides an opportunity to enhance your financial situation. For example, refinancing may allow you to switch from a variable to a fixed‑rate loan, consolidate debts like credit cards and car loans into your mortgage, or reduce your loan term to save on interest.
However, refinancing is a full application process, and it often involves new loan setup fees, discharge costs from your existing lender, and property valuation requirements. It takes longer, but can be more beneficial in the long run.
Key Differences: Refinancing vs Home Loan Top-Up
When weighing the decision to refinance or request a top‑up, it’s helpful to understand how each option works in comparison to the other. A top‑up increases your current loan amount with the same lender, leaving the existing loan structure mostly unchanged. In contrast, refinancing involves replacing your existing loan with an entirely new mortgage, potentially with a different lender, interest rate, or term.
In terms of fees and speed, a top‑up generally wins, but it may not offer the financial benefits of a lower rate or better loan structure. Refinancing often makes sense if your current loan is outdated or no longer competitive.
Eligibility Checklist
| Criteria | Top‑Up | Refinance |
|---|---|---|
| Minimum Equity Required | ~20% | ~20% |
| Full Credit Check | Sometimes | Yes |
| Proof of Income | Yes | Yes |
| Property Valuation | Often | Required |
| Maximum Borrowing Capacity | Limited | Higher Possible |
| Fixed‑Rate Loan Eligibility | Often blocked | Can switch out |
Pros and Cons
As you can see, both refinancing and loan top‑ups come with distinct advantages and potential drawbacks. The key is understanding which option aligns better with your current financial needs, long‑term goals, and equity position.
Before making a decision, it’s crucial to compare not just interest rates, but also loan flexibility, lender policies, and the overall impact on your repayment strategy.
Top‑Up Pros and Cons
Top‑ups are ideal for borrowers who are satisfied with their existing loan but require additional funds for a specific purpose. Top‑ups are typically fast to process, require minimal paperwork, and usually don’t involve a complete loan reassessment. They’re ideal for smaller amounts and short‑term goals, such as a kitchen upgrade or paying off high‑interest credit cards.
However, top‑ups won’t offer you a better interest rate or access to new loan features—you’re bound by the terms of your current mortgage. Also, not all lenders allow top‑ups on fixed‑rate loans, and some may charge an establishment or processing fee. If your loan‑to‑value ratio (LVR) exceeds 80% after the top‑up, you may also trigger Lenders Mortgage Insurance (LMI).
Refinancing Pros and Cons
Refinancing, although more time‑consuming, can result in significant long‑term savings. By securing a lower interest rate, you can reduce your monthly repayments or pay off your loan faster. You’ll also have the flexibility to switch lenders, restructure your loan, or access features like offset accounts, redraw facilities, and split loans.
On the downside, refinancing can incur upfront costs, including application fees, discharge fees, and valuation costs. If you’re currently on a fixed‑rate loan, breaking it early may incur break costs.
However, the potential savings and added flexibility that refinancing offers, predominantly when guided by a qualified broker, can make the process worthwhile for many borrowers.
When to Choose Top‑Up vs Refinancing?
Choosing between refinancing and a top‑up depends on your financial objectives, current loan structure, and how much equity you’ve built in your home.
At Stryve Finance, we help you assess all of these factors and run the numbers.
Opt for a top‑up if you’re satisfied with your current lender, have a competitive interest rate, and simply need access to extra cash quickly and easily. This is ideal for home improvements or one‑time expenses that don’t justify a full refinance.
On the other hand, consider refinancing if you’re unhappy with your interest rate, want to restructure your mortgage, or are managing multiple debts. Refinancing is also the better option if your lender doesn’t offer competitive features or won’t approve a top‑up.
What Are the Costs Involved?
Understanding the real cost behind each option helps you avoid surprises and ensures the benefits outweigh the fees.
Cost Comparison
| Cost Type | Top‑Up | Refinancing |
|---|---|---|
| Application fee | $0 – $200 | $0 – $600 |
| Property Valuation | Often waived | $200 – $400 |
| Discharge Fee (Old Lender) | None | $100 – $400 |
| Lenders Mortgage Insurance | If LVR > 80% | If LVR > 80% |
| Break Costs (Fixed Loans) | Rare | Can be high ($1000+) |
| Total Out of Pocket (Est.) | $0 – $400 | $400 – $2000+ |
At Stryve Finance, we conduct a comprehensive cost‑benefit analysis for every client, enabling you to make informed decisions with confidence. Whether you’re looking for short‑term convenience or long‑term savings, the right move depends on both your numbers and your goals.
Costs of a Top‑Up
Home loan top‑ups are generally low‑cost. You may be charged a small processing or establishment fee, depending on your lender. Since you’re staying with the same lender and not changing loan terms, there are no break costs or exit fees. However, if your LVR increases beyond 80%, you could be required to pay Lenders Mortgage Insurance (LMI) , which protects the lender, not you.
Costs of Refinancing
Refinancing comes with more fees, but potentially more rewards. You may need to pay:
- Discharge fees to your current lender
- Application or settlement fees to your new lender
- Property valuation fees
- Break costs if you’re on a fixed loan
Despite the upfront costs, refinancing can deliver long‑term financial benefits, including lower interest rates, simplified debt management, and potential interest savings by shortening your loan term. At Stryve, we help calculate your break‑even point to ensure the move is financially sound.
5 Common Myths Debunked
“Top‑ups are free money.”
Not quite. They still increase your loan balance and monthly repayments, which means you will pay more interest over time.
“Refinancing is too hard.”
Not with a broker like Stryve! We handle the paperwork, negotiations, and loan comparisons so you don’t have to.
“You can’t refinance if you’ve already topped up.”
You can refinance at any time, provided you meet the lender’s criteria and have enough equity remaining.
“All lenders offer the same top‑up policy.”
Each lender has different top‑up rules, limits, and fees. That’s why comparing options is essential.
“Refinancing always costs more.”
While there are fees involved, the long‑term savings from a better interest rate can far outweigh the upfront costs.
How Stryve Finance Helps You Decide
At Stryve, we recognise that no two borrowers are alike. That’s why we take a personalised approach, whether you’re considering a simple top‑up or a full refinance. We analyse your current loan, review your goals, and compare over 50 lenders to find the most cost‑effective and strategic solution for your needs.
Our job is to take the confusion out of home lending, and we do it at no cost to you, since the lender pays us. From paperwork to settlement, we’ll guide you every step of the way.
Need help deciding?
👉 Book your free consultation today with a Stryve mortgage expert in Sydney: Book a free consultation
FAQs
Is it better to top up or refinance my home loan?
The better option depends on your financial goals. If you need quick access to funds and are happy with your current loan, a top‑up may suffice. However, if you’re looking to secure a lower interest rate, consolidate debt, or improve loan features, refinancing can offer greater long‑term value.
How much can I top up my loan?
Usually up to 80% LVR, depending on your home’s value and income. Some lenders may allow more, but LMI may apply.
Can I refinance after a top‑up?
Yes. Once your equity builds back up or your financial situation improves, you can refinance any time.
Do I need a broker to refinance or top up?
A broker ensures you’re getting the best deal across the market and helps you avoid unnecessary fees or mistakes.
Final Thoughts: Your Equity, Your Choice
Both home loan top‑ups and refinancing offer practical ways to access your property equity, but the ideal choice depends on your current loan structure, financial objectives, and plans. Whether you’re funding a renovation, consolidating debt, or chasing a better deal, Stryve Finance is here to help.
We offer expert, unbiased advice, with access to a wide panel of lenders, so you can feel confident you’re making the best financial decision for your home and future.
Dylan Bertovic is the Director and Senior Finance Broker at Stryve Finance, specialising in non-traditional lending solutions. He helps clients across Australia with tiny home loans, construction finance, equipment and asset lending, refinancing, and investor loans. With deep expertise in self-employed and renovation mortgages, Dylan is known for crafting tailored strategies that get results
