“Being disqualified from refinancing is rarely permanent. Understanding which lender criteria you do not meet is the first step to identifying who you do.” [cite: 285]
Refinancing is a new loan application, and lenders assess it on your current financial position rather than your history with the existing lender. [cite: 286] The factors that most commonly prevent approval are insufficient equity, impaired credit history, inability to meet serviceability at the required buffer rate, or income instability. [cite: 287]
Insufficient equity
If your property value has fallen or your LVR is above 90 to 95%, your options narrow significantly. [cite: 289] Above 80% LVR, LMI will apply and fewer lenders are available. [cite: 290] At very high LVRs above 95%, most lenders will not refinance at all. [cite: 291] Where possible, waiting until equity improves through repayments or property value growth, or making a lump sum contribution to reduce the LVR, can open the door again. [cite: 292]
Serviceability at the current rate
Lenders assess your ability to repay the refinanced loan at the contract rate plus the APRA 3% buffer. [cite: 294] If your income-to-debt ratio does not meet this test, you will not be approved. [cite: 295] Income reductions, additional debts taken on since the original loan, or HECS obligations can all affect this assessment. [cite: 296]
Impaired credit history
Missed payments, defaults, or multiple credit enquiries in a short period reduce your credit score and limit lender access. [cite: 298] Some specialist non-bank lenders work with impaired credit at higher rate points, but the options are narrower and the rates less competitive. [cite: 299]
Fixed rate and break costs
If you are mid-way through a fixed term and the break cost is significant, this may make refinancing financially unviable even if you would otherwise qualify. [cite: 301] A break cost quote from your current lender takes one phone call and is valid for 24 to 48 hours. [cite: 302]
You may consider seeking independent advice from a licensed mortgage broker or financial professional to assess your personal circumstances. [cite: 303] This information is general in nature and does not take into account your objectives, financial situation or needs. [cite: 304] Lender eligibility criteria vary. Speak with a licensed mortgage broker to assess your current position and identify your options. [cite: 305] All loans are subject to lender approval. [cite: 306]
Sources: ASIC MoneySmart, Refinancing Your Home Loan 2025; 20/20 Finance, Refinancing in Australia 2026; Navigate Financial Wealth, Refinancing 2026; [cite: 307] APRA CPG 223 Serviceability Guidance. [cite: 308]
