Short answer: switching a standard variable loan typically costs $600 to $2,000 in fees. Break a fixed rate early, or need Lenders Mortgage Insurance again, and that number can jump into five figures. Here's where every dollar actually goes.
Most of the fear around refinancing costs comes from a handful of worst-case scenarios getting mixed up with the typical case. For the average homeowner on a standard variable loan with reasonable equity, the switching costs are modest and usually paid back within a year of savings. This guide breaks down each fee on its own, so you can work out which ones actually apply to you.
The standard switching fees
For most homeowners on a standard variable rate with reasonable equity, refinancing comes down to three smaller charges rather than one big one.
Discharge fee (your current lender)
Your existing lender charges a discharge fee to formally close out the mortgage on your property title. These are set by each lender individually, so they vary: as at June 2026, ANZ charges $160 while Commonwealth Bank, NAB and Westpac each charge $350. The average across the market sits around $300.
Application or settlement fee (your new lender)
Some lenders charge a fee to process your new loan, though many waive this specifically for refinance customers to win the business. Worth asking your new lender directly, and worth asking them to waive it if they haven't already.
Government registration fees
Your state or territory land registry charges a fee to register the discharge of your old mortgage and the registration of your new one, since your property title needs updating either way. In New South Wales, for example, each dealing fee sits at $182.73 (effective 1 July 2026), so around $365 total for both registrations. Other states charge similar amounts.
Add it up: for a standard variable-rate switch on an average Australian loan, total upfront cost typically lands between $600 and $2,000. That's the number to keep in mind unless one of the next two sections applies to you.
Lenders Mortgage Insurance: the cost that catches people out
If your new loan amount is more than 80% of your property's current value, your new lender will require Lenders Mortgage Insurance (LMI), and this is where refinancing costs can balloon unexpectedly. LMI protects the lender, not you, and importantly, it is not transferable between lenders. Paying it once with your original loan doesn't carry over.
Depending on your loan-to-value ratio and loan size, LMI can run anywhere from $5,000 to $20,000 or more. It's the single most expensive cost that can appear in a refinance, and it's easy to overlook if you haven't checked your current equity position recently.
Before applying anywhere, get a rough estimate of your property's current value and divide your loan balance by it. If that figure is above 80%, ask any lender you're considering for an LMI estimate before you commit to an application.
Break costs on fixed-rate loans
Exiting a fixed-rate loan before the fixed term ends is the other cost that can turn a routine refinance into an expensive one. Break costs alone can add anywhere from $3,000 to $15,000 or more, depending on your rate, current wholesale rates, and how much time is left on your fixed period.
The mechanics: your lender locked in funding at a wholesale rate to offer you your fixed rate. If wholesale rates have dropped since then, breaking early means the lender loses the difference they'd otherwise have earned, and that shortfall gets passed to you as a break cost. The bigger the rate gap and the longer your remaining term, the higher the number.
Your lender is required to give you a break cost estimate on request, before you commit to anything. If you're within a few months of your fixed term ending anyway, it's usually worth waiting, a point covered in more detail in our guide to refinancing timing.
Not sure which costs apply to you?
Refii's savings estimate factors in your loan type and equity to give you a realistic number in about two minutes.
The exit fee myth (and what's actually banned)
A common misconception is that lenders can still charge a fee simply for leaving. Deferred establishment fees, commonly called exit fees, were banned on new home loans in Australia from 1 July 2011. Before the ban, these fees could reach as high as $7,000 and often negated any benefit from switching. If your loan was taken out after that date, your lender cannot charge you one.
What the ban doesn't cover: administration and government fees still apply, and so do break costs on fixed-rate loans, since those aren't classified as exit fees. If your loan predates July 2011, it's also worth checking whether an old-style exit fee could still apply, though this is now rare given how few loans from that era remain unrefinanced.
Working out your break-even point
The only number that really matters is how long it takes your monthly savings to cover your total switching costs. The formula is simple: total switching costs divided by monthly savings equals months to break even.
| Scenario | Typical total cost | Monthly saving | Break-even |
|---|---|---|---|
| Standard variable, under 80% LVR | $600 to $2,000 | $150 to $400 | 4 to 10 months |
| Fixed-rate break, mid-term | $3,600 to $16,500 | $150 to $400 | 10 to 40 months |
| LMI required again (over 80% LVR) | $5,600 to $21,500 | $150 to $400 | 15 to 50 months |
The ranges are wide because every loan is different, but the pattern holds: a standard switch pays for itself fast, while break costs or LMI stretch the timeline out. If you're planning to stay in the property well beyond your break-even point, the maths still tends to favour switching. If you expect to sell or refinance again soon, it's worth running the numbers first.
The full costs checklist
This is your baseline exit cost, ask for it in writing.
If so, request a break cost estimate before applying anywhere else.
Above 80% means LMI is likely required again with a new lender.
Many will, especially for straightforward refinance applications.
Total costs divided by monthly savings tells you exactly what you're committing to.
Sources
- Money.com.au, Cost to Refinance a Home Loan in Australia.
- Mortgage World Australia, Cost of Refinancing in Australia: Every Fee Itemised.
- Mortgage World Australia, Discharge of Mortgage: Australian Guide, Fees & Timeline.
- Library of Congress, Australia: Mortgage Exit Fees Banned.