Refinancing your home loan can be like a breath of fresh air. You may find yourself able to take advantage of superior products and services offered by another bank if your current setup isn’t working for you, or if your housing goals have changed.

However, like any financial decision, it needs to be considered carefully, with full understanding of both the short and long-term implications. To help you get this right, we’ve put together a list of some of the most common mistakes people make when refinancing their home loans, so that you can avoid making them too.

1. Only looking at interest rates

Of course, interest rates are a huge part of what home loans mean for you and your family in practice. However, they’re not the only thing you should look at when making this decision.

You should also take into consideration the other features and benefits offered by banks to customers who take out one of their home loans. For example, do they charge annual or account keeping fees? These are the type of additional cost savers that should be factored into your maths when choosing who to refinance with. This is why it’s important to consider the comparison rate when looking at home loans. The comparison rate includes the interest rate as well as certain fees and charges relating to the loan. The aim is to help you identify the true cost of the loan and compare loans across financial institutions.

Speaking of maths, to help make comparison calculations more straightforward, we have a range of free, helpful home loan calculators on our website that will allow you to do everything from comparing home loans to calculating extra repayments.

2. Not considering your cancellation costs

As well as looking at where you’re going, you need to understand the costs that could be associated with leaving your current lender. Breaking a fixed rate home loan can be particularly expensive, so it’s important that any penalties are costed into your decision making.

Apart from break costs on a fixed rate loan, ‘exit’ fees are no longer payable for variable rate loans advanced after 1 July 2011.

3. Refinancing when you’re in a tricky situation

Just like the first time around, you’ll need to demonstrate to the lender that you meet their lending criteria. Therefore, you ideally want to look at refinancing your home loan when you’re in a strong financial position. Even if you haven’t made late repayments or missed repayments, both of which are red flags to lenders, it’s still worth looking at other ways to improve your credit report. This could include paying off debts and ensuring bills are paid on time.

4. Flexibility

It’s all too easy to choose a loan that suits your financial situation here and now, but doesn’t provide you with flexibility you might need further down the track.

At Qudos Bank, we have a range of home loans that aim to help you achieve your goals. In addition, we have several home loans with features that are specifically designed to provide even more flexibility, including extra repayments if you’re able to repay your loan faster than you initially planned. Instant redraw is available from within Online Banking if you end up needing to access these funds.

If you’re considering refinancing your home loan, consider refinancing with Qudos Bank. We have a range of flexible home loan options that are available to both new and existing customers. On our website, you can also find a series of informative videos that dive deeper into refinancing as well as the ins and outs of home loans more generally


Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305.

Normal lending criteria, terms and conditions and fees and charges apply. Mortgage insurance is required for home loans over 80% and is subject to approval.

You should read and consider the relevant Terms and Conditions and our Financial Services Guide available on our website, before deciding whether to obtain any of our financial products or services.

As the information in this blog is of a general nature and has been prepared without considering your objectives, financial situation or needs, before acting on the information, consider its appropriateness to your circumstances. 

 Published May 2022