Should you refinance your WA home loan in 2026?
Maybe, and 2026 is a year to at least look. With rates at a 15-year high and record numbers of Australians switching, whether you should refinance your home loan comes down to the gap between your rate and the sharpest on offer, how long you will stay, and the cost of moving.
Weighing up a refinance in 2026.[/caption]
Short answer: maybe, and 2026 is a year to at least look. Interest rates sit at a 15-year high. A record number of Australians refinanced in the first half of the year. And the gap between what loyal customers pay and what new customers are offered has not gone away. Whether you should refinance your home loan is not really about the headlines though. It comes down to three things. The gap between your rate and the sharpest on offer. How long you plan to stay. And what moving actually costs. Here is how to weigh it honestly, and how we go about it for you.
Should you refinance your home loan in 2026?
Short answer: it is worth a proper look. With rates at a 15-year high and plenty of lenders competing for refinances, the spread between the best and worst rates is wide. A switch makes sense when the saving over the time you will stay in the home clearly beats the cost of moving. For a lot of borrowers right now, it does.
A record wave of Australians refinanced in the first half of 2026, around 65 billion dollars worth. That is not a fad. It is people realising that the rate they signed up for years ago is rarely the rate they are still on. It is almost never the sharpest one available today. The only way to know where you stand is to compare your current loan against the wider market. Whether to refinance your home loan starts there, with an honest look at the gap.
What is the loyalty tax, and is your bank charging it?
Short answer: the loyalty tax is the gap between what a lender charges a long-standing customer and the sharper rate it offers someone new. Banks rarely reward you for staying. Over the years, a loyal borrower can quietly drift onto a rate well above the market. A new customer walking in the door would be offered sharper.
The ACCC’s inquiry into home loan pricing found exactly this: existing borrowers typically pay more than new ones for much the same loan. Moneysmart notes that variable rates across the market can differ by more than two per cent. On a typical loan, a gap like that is real money every month. Staying put feels easy, and that comfort is exactly what the tax is charged on.
The sharpest rate a bank offers is almost always kept for the customer walking in the door, not the one who has stayed loyal for years.
When does it make sense to refinance your home loan?
Short answer: when the saving over the time you will stay beats the cost of moving. That is the core test. Beyond chasing a lower rate, people also refinance to shorten or extend the term, to fix or unfix, to roll other debts into the home loan, or to put built-up equity to work.
The break-even is simple in principle: how long before the monthly saving pays back the one-off cost of switching. If you are staying for years, a worthwhile rate cut usually clears that with room to spare. There is also a WA income angle worth knowing. With a full quarter of this financial year’s pay now on record, lenders can take account of overtime, site allowances and other regular extras they may have set aside earlier in the year. That can lift borrowing capacity for a refinance. How that income is read is its own skill, and it is the same ground as our guide to how FIFO income is assessed. If the goal is to pull equity out rather than just cut the rate, that path is covered in using your home equity.
What does it cost to refinance in WA?
Short answer: usually a discharge fee on your old loan and an application or settlement fee on the new one, plus a possible break cost if you are on a fixed rate. If you owe more than about eighty per cent of your home’s value, lender’s mortgage insurance can come into it. None of it is a reason not to look, but it all goes into the maths.
What it costs to refinance your home loan depends on the lender and the loan, which is exactly why the comparison matters. The point is to weigh the one-off cost of moving against the ongoing saving, not to be put off by a discharge fee. The official list of switching costs is set out on ASIC’s Moneysmart, and we go through every one of them with you before anything is lodged.
What refinancing can cost, and when it applies
| The cost | When it applies |
|---|---|
| Discharge fee | Charged by your current lender to close the existing loan. Applies on most switches to a new lender. |
| Application or settlement fee | Charged by the new lender to set the loan up. Some waive it as a sign-up offer. |
| Break cost | Only on fixed-rate loans ended before the fixed term is up. It can be large, so it is checked before anything else. |
| Lender’s mortgage insurance | Can apply if you owe more than about eighty per cent of the home’s value. A partial refund of earlier LMI is sometimes available. |
Could falling values stop you refinancing?
Short answer: sometimes, yes. If your loan is now more than about eighty per cent of your home’s current value, your options narrow and the sharpest rates can slip out of reach. With some values softening, more borrowers are finding themselves there. It is the first thing worth checking, before you get your hopes up on a rate.
Lenders weigh the loan-to-value ratio, and once it climbs above about eighty per cent a competitive refinance gets harder. That does not always mean stuck. Extra repayments, a bit of time, or a lender with a different read on your property can all change the picture. Equity and LVR are the same ground as our guide to low deposits and LVR in WA. The point is to know your number before you apply, not after.
How do we handle a refinance for you?
Short answer: we do the legwork. We compare your current loan against the panel, work out whether a switch genuinely pays, and if it does, we handle the application and the switch end to end. If it does not stack up, we tell you, and we will not move you just to move you.
Before you refinance your home loan, we find your real position and run the numbers properly, so the decision rests on maths rather than a sales pitch. If you like to know what to ask, our guide to the questions to ask a mortgage broker covers it.
How it works with us
- We find your real position. Your current rate, your balance, your loan-to-value, and what the sharpest comparable rates look like today.
- We run the maths honestly. The ongoing saving against the one-off cost of moving, so there are no surprises later.
- We push your own lender too. Sometimes the best result is a rate review from your current bank once they know you are serious about leaving. We will ask for you.
- If switching wins, we handle it. The application, the paperwork and the discharge, across the 60+ lender panel, start to finish.
- We keep an eye on it. Rates move, and a refinance is not a one-and-done. If it is worth another look down the track, we will tell you.
From the broker’s desk: the loyalty tax is real, and it is quiet. It does not show up as a fee on your statement. It shows up as a rate that slowly drifts above the market while nothing tells you it has happened. That is the whole reason a review every year or two is worth it. We will look at your loan properly and tell you honestly whether moving is worth it, and if it is not, we will say so. No churn for the sake of it. If it has been a while since anyone looked at whether you should refinance your home loan, have a chat. It costs nothing to find out where you stand.
About Pilbara Finance
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Start with a chatThis guide is general information for the Australian market, not advice about your situation. Lender credit policy changes, and what applies to you depends on your circumstances. Pilbara Finance is a credit representative (478535) of Mortgage Specialists Pty Ltd, Australian Credit Licence 387025.