“Switching banks is the most common form of refinancing in Australia and for many borrowers it is the only way to access genuinely competitive pricing.” [cite: 331]
Yes. Refinancing to a different bank or lender is standard practice. [cite: 332] External refinancing, where your new lender pays out your existing loan and registers a new mortgage, accounts for a significant share of all refinancing activity each year. [cite: 333]
Why borrowers switch banks
Your current bank often reserves its best rates for new customers rather than existing ones. [cite: 335] The gap between what a bank offers a new customer and what a long-term existing customer pays can be 0.2 to 0.5%. [cite: 336] Switching banks is the most reliable way to close that gap. [cite: 337]
The process
Identify a suitable loan at a different lender. Submit a formal application with supporting documents. [cite: 339] The new lender conducts a valuation and assessment. On approval, loan documents are signed. [cite: 340] Settlement occurs via PEXA: the new lender pays out the existing bank and registers the new mortgage. [cite: 341] Your new loan begins from settlement day. [cite: 342]
What to check before switching
- Whether you are in a fixed rate period and whether break costs apply. [cite: 344]
- Your current LVR, as above 80% may trigger LMI at the new lender. [cite: 345]
- Whether the new loan’s comparison rate (not just the advertised rate) is genuinely better after all fees. [cite: 346]
- Your credit file, since multiple applications to different lenders simultaneously create multiple enquiries which can reduce your score. [cite: 347]
You may consider seeking independent advice from a licensed mortgage broker or financial professional to assess your personal circumstances. [cite: 348] This information is general in nature and does not take into account your objectives, financial situation or needs. [cite: 349] Refinancing to a different lender involves a new credit assessment. Speak with a licensed mortgage broker before submitting any application. [cite: 350] All loans are subject to lender approval. [cite: 351]
Sources: Canstar, Refinance Home Loan Comparison 2026; ASIC MoneySmart, Refinancing Your Home Loan 2025; MFAA Industry Intelligence Report 2025; [cite: 352] The Conversation, Refinancing 2026. [cite: 353]
