For most of 2025, refinancing was a pretty simple story. The RBA cut rates three times across the year, lenders competed for new business, and borrowers who switched saved real money. Then 2026 arrived — and the script changed.
The RBA lifted the cash rate in February 2026, then again in March. The rate now sits at 4.35%. Three of the four major banks spent much of Q2 forecasting further hikes in the second half of the year, though there's disagreement on timing and magnitude. One major bank has already walked that position back.
So does refinancing still make sense? For a lot of Perth borrowers, yes — but the reasons have shifted.
What the Rate Environment Actually Looks Like Right Now
The RBA's June 2026 decision was a hold at 4.35%. That's welcome news after a run of consecutive increases, but it doesn't mean the pressure is off.
Variable home loan rates across mainstream lenders are broadly sitting between 5.6% and 6.5% per annum depending on borrower profile, lender, and loan structure. Westpac is forecasting two further cash rate increases in August and September. NAB has now revised its view and believes the next move is more likely to be a cut — but won't put a date on it. ANZ is sitting on the fence, forecasting no further changes through to the end of 2027. Commonwealth Bank expects two rate cuts, but not until the first half of 2027.
In other words: nobody really knows, rates could go up again, and you shouldn't be making refinancing decisions based on forecasts.
What you should base it on is the spread between your current rate and what's available in the market right now.
The Core Question: What Rate Are You Paying?
This is where the refinancing conversation has to start. Not with forecasts, not with economic commentary — with your loan statement.
Plenty of Perth borrowers are sitting on a "loyalty tax." That's the industry term for what happens when a lender saves competitive rates for new customers while leaving existing ones on rates that haven't been updated in years. According to Canstar data from mid-2026, 40 lenders are currently offering at least one owner-occupier principal-and-interest variable rate below 6%. If your current rate is sitting at 6.5% or above, there's meaningful money on the table.
As a general guide: if you can secure a rate that's at least 0.50% lower than your current rate, the refinancing costs (legal fees, discharge fees, application fees) will typically break even within 12 to 18 months. After that, you're ahead.
When Refinancing Makes Strong Sense in 2026
- Your fixed rate is ending: This is the most urgent scenario. Borrowers who locked in rates at 2.0–2.5% in 2021 and 2022 have been reverting to variable rates around 6.5% or more. That's a payment shock of $1,000+ per month on a $600,000 loan. If your fixed period is ending in the next six months, start the process now — don't wait for settlement day.
- You've built significant equity: If your LVR has dropped below 80% (either through repayments or property value growth), you may now qualify for products you couldn't access when you first borrowed. Lenders price loans differently at different LVR bands, and dropping below 80% typically unlocks sharper rates.
- Your financial situation has improved: Got a pay rise? Paid off other debts? A stronger borrowing profile today may qualify you for products you didn't qualify for at your original application, even at current rates.
- You're on Keystart and ready to transition: For West Australians who used Keystart to enter the market, refinancing to a mainstream lender once equity is sufficient is often part of the original plan. With Keystart's variable rate at 7.60%, even a mainstream lender rate of 6.0% represents significant monthly savings.
When Refinancing Probably Isn't Worth It Right Now
- The rate difference is small: If you'd only save 0.25% by switching, you'll likely spend as much on discharge and application fees as you save in the first year. Run the numbers first.
- You have a fixed rate with break costs: Breaking a fixed rate early can carry substantial exit costs depending on your lender and the rate environment. Always ask for a break cost estimate before going any further.
- You plan to sell or substantially renovate in the next 12 months: Refinancing involves both a discharge from your current lender and an application with the new one. If you're going to sell soon, you may not hold the new loan long enough to recover the switching costs.
What Refinancing Actually Costs
People often think refinancing is free. It's not — but the costs are usually manageable.
Typical costs include:
- Discharge fee from your current lender: $150–$400
- Legal or settlement fee to the new lender: $150–$400
- Government mortgage registration: around $200–$350 in WA
- Application or establishment fee at the new lender (varies; some lenders waive this for refinancers)
Most refinancing transactions in Perth cost somewhere between $500 and $1,500 all up, excluding break costs on fixed loans. Over a period of 12–18 months at a 0.50% lower rate on a $600,000 loan, that's easily recovered.
What's on Offer: Our Refinance Savings Calculator
Run your own numbers before you pick up the phone. Enter your current loan balance, current rate, and an indicative new rate and you'll see your monthly and annual savings, and how long it takes to recover the switching costs. It's free and takes two minutes.
FAQ
Does refinancing hurt my credit score?
A refinancing application involves a credit enquiry, which has a small temporary effect on your credit score. Multiple applications within a short period can compound that effect, which is why using a broker to compare lenders — rather than applying directly to several at once — is usually a better approach.
Can I refinance if my property value has fallen?
Possibly. Lenders generally require a loan-to-value ratio of 80% or lower for standard refinancing without LMI. If your property has fallen in value and your LVR has risen above 80%, you may still be able to refinance but LMI may apply. A broker can assess your options.
How long does refinancing take?
Most refinancing transactions in Perth settle within three to six weeks from application, though this can vary. Start the process at least eight weeks before the end of a fixed rate period to avoid reverting to a high variable rate while you wait.
Will my repayments go up if I refinance to a longer loan term?
Not necessarily, but it depends on what you negotiate. You can refinance to the same remaining term, which keeps your repayment timeline the same. Extending the term can lower monthly repayments but increases total interest. Your broker should model both options.
Do I have to use my existing lender when my fixed rate expires?
No. When a fixed rate period ends, you automatically move to your lender's variable rate — but you're free to refinance immediately. You're not locked in.
Get a Rate Health Check
At Central Lending Solutions, our refinancing service starts with a free rate health check. We look at your current rate, your loan balance, your LVR, and what's available across 30-plus lenders — then we tell you honestly whether switching is worth it once the costs are factored in.
We watch your rate so you don't have to. Book a free chat and let's run your numbers.