Should I Refinance My Home Loan in 2026?

The 80/30/24 Rule for Refinancing Your Home Loan

Before you run detailed numbers, the 80/30/24 Rule tells you in about two minutes whether refinancing is worth exploring at all. It has three checks. Your loan sits at 80% LVR or below. The comparison rate gap is at least 0.30%. You recover your switching costs within 24 months. Clear all three gates and refinancing is worth pursuing. Fail one and there is almost always a smarter move than switching.

• Gate 80 (Equity)

  Is your loan to value ratio 80% or lower?

  Threshold: 80% LVR or below

  Why it matters: Above 80%, Lenders Mortgage Insurance is charged again and can wipe out your savings

• Gate 30 (Rate gap)

  Is the comparison rate gap at least 0.30%?

  Threshold: 0.30% or more

  Why it matters: Below this, renegotiating with your current lender usually beats refinancing

• Gate 24 (Breakeven)

  Will the savings cover your switching costs within 24 months?

  Threshold: 24 months or less

  Why it matters: A longer payback means the cost and effort outweigh the benefit

Gate 80 checks your equity

Divide your current loan balance by your property value. If you owe $480,000 on a home worth $700,000, your LVR is about 69%, comfortably under 80%.

Above 80% the sums change sharply, because Lenders Mortgage Insurance is not portable. If you paid LMI when you bought, you cannot transfer that policy to a new lender. Switching above 80% means a fresh premium, which can run to several thousand dollars and is usually added to the loan balance. That single cost is enough to sink most breakeven calculations, which is why Gate 80 comes first.

Gate 30 checks your rate gap

Compare the comparison rate on your current loan to the comparison rate you would realistically qualify for now. Comparison rate against comparison rate, not headline against headline, because the headline number leaves out the ongoing fees you pay every month for the life of the loan.

Lenders price new borrowers more sharply than existing ones. The gap between the rate you signed up for and the rate the same lender offers a new customer today tends to widen the longer you leave the loan untouched. Brokers call it the loyalty tax. If you have not reviewed your rate in the past two years, assume there is a gap until you have checked.

If the gap comes in under 0.30%, a call to your current lender is almost always the better first move. Below that threshold the savings are usually too thin to justify a full application, and your existing lender may simply match the offer.

Gate 24 checks your breakeven

Breakeven is the gate that usually decides it, and it is simple arithmetic.

Take a worked example. You owe $500,000 on a home worth $700,000, which puts your LVR at about 71%, so Gate 80 passes. You find an offer 0.40% below your current comparison rate, so Gate 30 passes comfortably. On a loan that size with roughly 30 years remaining, 0.40% takes about $130 off your monthly repayment. Your switching costs come to $1,100: a $350 discharge fee, a $400 application fee and a $350 valuation fee.

$1,100 divided by $130 is approximately 8.5 months to breakeven. All three gates clear, so refinancing is worth pursuing here. Use your own figures: your switching costs divided by your monthly saving equals your breakeven in months, or run them through our refinance calculator, which applies the same LVR, LMI and breakeven checks.

Switch or stay on the same loan

The same loan can be a clear switch or a clear stay depending only on the size of the gap. Both columns below assume a $600,000 loan with about 30 years remaining and $1,500 in switching costs.

In the Stay column, a 19 month breakeven technically passes Gate 24, but the 0.20% gap fails Gate 30, so the rule says do not switch. A gap that thin is the one your current lender is most likely to match, which gets you most of the benefit with none of the cost or paperwork.

Three things to check before you apply

1. The term reset

Refinancing usually restarts your loan on a new 30 year term. Spreading the remaining balance over a longer period lowers the monthly repayment, but it can increase the total interest you pay across the life of the loan even at a lower rate. If your goal is to cut total cost rather than free up monthly cash flow, ask your broker to match the new loan to your remaining term rather than resetting the clock.

2. Your borrowing capacity

Refinancing triggers a fresh credit assessment. Under the APRA serviceability buffer, lenders must assess you at a rate 3% above the actual loan rate, so with rates where they are your capacity may be lower than when you bought. Some lenders will apply a reduced buffer for a like for like refinance where you are not increasing the loan amount or extending the term. It is worth checking your borrowing capacity before you commit to a full application.

3. Clawback and who actually pays it

Many borrowers believe lenders charge an exit penalty if you refinance within a few years. They do not. Exit fees and deferred establishment fees on regulated home loans have been banned in Australia since July 2011. What does exist is clawback: if you refinance within roughly two years of settlement, your lender recovers the commission it paid your broker. Some brokers pass that cost on to the client under the terms of their credit guide. Ask your broker directly whether theirs does, before you sign anything.

When the 80/30/24 Rule says do not refinance

The rule is just as useful when it tells you to stay put. If your LVR is above 80% and LMI would apply again, if the comparison rate gap is under 0.30%, or if your breakeven stretches past two years, the smarter move is usually to renegotiate with your current lender.

When Refinancing Your Home Loan Makes Sense

The gates tell you whether the numbers work. These are the four situations where we most often see them clear, even in a rising rate market, because lenders still compete hard for good refinance business.

• You are overpaying on a variable rate. If there is a gap of 0.5% or more between your current comparison rate and what is available elsewhere, that is worth investigating. A gap that size usually clears Gate 30 with room to spare. Stryve Finance can show you exactly where you sit against the current market across dozens of competing lenders.
• Your fixed rate is about to expire. This is the most common trigger we see in 2026. If you fixed in 2023, your term is rolling off about now, and the standard variable rate your lender reverts you to is usually well above the sharpest offers in the market. Revert rates are rarely competitive, and lenders count on inertia. Start comparing 8 to 12 weeks before your fixed term ends rather than after, so you are not sitting on the revert rate while an application is processing. Before you decide, understand your fixed versus variable rate options.
• You want to access equity, with one caveat. If your property has grown in value you may be able to unlock that equity for renovations, debt consolidation or investing. Values rose 8.6% nationally in 2025 (Cotality, formerly CoreLogic), the strongest calendar year gain since 2021, so anyone who bought before 2024 is likely holding real equity. But the market has turned this year. National dwelling values fell 0.9% in August 2026, a fifth consecutive monthly decline that left values 3.6% below the March 2026 peak, with 93% of capital city suburbs recording a fall through winter. Sydney sits around 7.1% below its peak. You are probably still ahead of where you bought, but expect a conservative valuation and do not budget on last year's growth. This is a cash out refinance and carries different LVR requirements, so understand the specifics before you apply.
• Your financial situation has improved. If you have had a pay rise, cleaned up your credit history or cleared other debts since you bought, you may now qualify for products that were out of reach at purchase. That is especially relevant for first home buyers who stretched to get into the market in 2023 or 2024. A Stryve Finance broker can reassess your borrowing profile in as little as 15 minutes.

When Refinancing Does Not Make Sense

In some situations refinancing costs more than it saves. Hold off if any of these apply to you.

• Break costs on a fixed rate loan. If you are on a fixed rate and want to leave before the term ends, your lender can charge break costs. They are calculated on the difference between your fixed rate and the current wholesale rate for the remainder of your term, and they can run into the thousands. In a rising rate market break costs are often lower than they would be in a falling market, but ask your lender for a written break cost quote before you do anything else. The figure changes daily.
• Small loan balances. If you owe less than $250,000 the maths gets harder to justify. A 0.30% reduction on a $250,000 loan saves about $48 a month, so $1,000 in switching costs takes roughly 21 months to recover. That scrapes inside Gate 24 with very little margin for a valuation coming in low or a fee you did not budget for.
• Limited equity. If your property value has not grown, or has dipped in the current downturn, refinancing could push your LVR above 80% and trigger Lenders Mortgage Insurance a second time. LMI protects the lender, not you, and it can add thousands to your loan balance.
• Switching because you are worried. Feeling uneasy about rising rates is reasonable, but it is a prompt to run the 80/30/24 check, not a reason to switch on its own.

Typical refinancing costs in Australia in 2026

Some lenders will absorb part of these costs to win your business, and that is worth asking about. A fee waiver attached to a higher ongoing rate is not a saving, though. Check the comparison rate before you accept one.

Why the Comparison Rate Is the Number That Matters

A sharp headline rate is no saving if the comparison rate on the new loan is higher than what you pay now. The advertised rate wins attention, while the fees keep arriving every month for the life of the loan.

The comparison rate exists for exactly this reason. ASIC requires lenders to display it alongside the advertised rate so you can see the true annual cost including fees. When you are evaluating any offer, and particularly when you are running Gate 30, the comparison rate is your anchor.

It does have one limitation. The standard comparison rate is calculated on a $150,000 loan over 25 years, which is well below the size of most Australian mortgages today. It is still the best like for like measure available, but on a larger loan the real impact of ongoing fees will differ from what the comparison rate implies. Always calculate the total cost over the period you actually plan to hold the loan.

Refinancing vs Renegotiating with Your Current Lender

Before you go through a full refinance there is a simpler first step, and it is exactly what the 80/30/24 Rule points you to when the gap is marginal. Call your current lender and ask for a rate review.

Tell them you have been comparing rates, you have seen better offers, and you would like to know how they can retain you. Be specific. Quote the rates you have found and name the lenders. Ask to be put through to the retention team rather than general customer service, because retention staff have discretion to offer discounts that are never publicly advertised. Then ask for the new rate in writing.

A broker strengthens your hand here. With access to 50 or more lenders, our brokers can pull live rate data across the market and show your current lender exactly what you have been offered elsewhere, so the conversation runs on evidence rather than guesswork.

When renegotiating is not enough. If your lender will not move, if the gap to the market is still significant after their best offer, or if the product lacks features you actually need such as a full offset account or flexible redraw, that is when refinancing becomes the right call.

What the Late 2026 Rate Outlook Means for Your Decision

With all four major banks forecasting at least one more increase before the end of the year, the natural question is whether you should lock in a fixed rate now.

Fixed rates are priced on expectations. Lenders build anticipated increases into their fixed rate products, so a fixed rate today already reflects the market view of where the cash rate is heading. Fixing now buys you certainty, and you pay for that certainty in the rate.

Staying variable keeps your flexibility, including unlimited extra repayments, offset benefits and the upside if rates eventually fall. It also leaves you exposed if they keep climbing. A split loan, part fixed and part variable, is worth discussing if you would rather hedge than choose.

Rather than trying to time the RBA, focus on whether your current loan is costing you more than it should. That is a question you can actually answer. If you bought between 2023 and 2025, your income, equity and credit profile may have improved enough to qualify for better products regardless of what the RBA does on 29 September. If you are ready to see what is available, compare the latest refinance rates for 2026.

Get a Personalised Refinancing Assessment

Every situation is different. Your loan size, LVR, income type and goals all shape whether refinancing makes sense. Run the 80/30/24 check yourself, then let a broker confirm it. A short conversation gives you clarity in about 15 minutes, with no obligation to proceed.

At Stryve Finance you get access to 50 or more lenders, full commission transparency so you can see exactly what the lender pays us, and specialist support for self employed applicants, with no hidden fees.

Get a personalised refinancing assessment and see where you actually sit.

Frequently Asked Questions About Refinancing in 2026