Refinancing
Refinancing and Debt Restructuring: Stop Paying the Bank Loyalty Tax
Your bank is counting on you not looking. It usually takes one conversation to find out what that is costing you.
If you have not reviewed your mortgage in the last twelve to eighteen months, there is a good chance you are paying what the industry quietly calls a loyalty tax. That is a higher interest rate than the same bank is offering a brand new customer walking through the door today.
Lenders rely on inertia. Introductory discounts expire, variable rates drift upward, and borrowers end up overpaying for years without ever being told.
Refinancing is not only about chasing a lower advertised rate. Structured properly, it can release equity for renovations or an investment purchase, consolidate expensive debt, rebuild your offset structure, or simply free up monthly cash flow.
I bring more than 20 years of financial services experience to your side of the table, including 14 years in executive roles inside a major Australian bank. I know how banks calculate retention discounts, which means I know how to push for a better rate where you are, or move you somewhere that actually wants your business.
At Prowest Financial Solutions, we help clients nationwide review, negotiate and refinance without the process eating their week.
Why refinance? Start with the goal, not the rate
Refinancing should deliver a measurable benefit. Before we move anything, we work out which of these you are actually trying to achieve.
The usual reasons people refinance
- Lower monthly repayments: Moving to a sharper rate to cut your interest charge and free up cash flow each month.
- Unlocking equity: Releasing equity built up in your home to fund renovations, buy an investment property, or hold as a buffer.
- Debt consolidation: Rolling personal loans, card balances or car finance into your mortgage to cut the total monthly outgoing.
- A fixed term expiring: Fixed periods roll onto a revert rate that is rarely competitive. Restructuring before that happens is far easier than after.
- Better loan features: Getting access to a full offset account, sub-accounts, or a workable redraw facility that a basic loan does not offer.
Not sure what rate you are actually on right now? Most people are not. That is the first thing we check.
Get a mortgage health checkThe true cost of refinancing: working out your break-even
Refinancing is only worth doing if the ongoing saving outweighs the cost of switching. The switching costs are smaller than most people expect.
| Cost | Typical range | What it covers |
|---|---|---|
| Discharge fee | $150 to $400 | Charged by your existing lender to release the mortgage |
| Government registration | $100 to $200, varies by state | Transferring the mortgage security on the title |
| New application or setup fee | $0 to $300 | Charged by the incoming lender, and often waived |
| Typical total | Around $350 to $800 | What it usually costs, all in, to move lenders |
A worked example
The maths matters more than the rate itself. Here is how a one percentage point reduction plays out on a $500,000 balance.
| Measure | Figure |
|---|---|
| Loan balance | $500,000 |
| Rate reduction achieved | 1.00 percentage point |
| Interest saved | Around $5,000 a year, or about $416 a month |
| Cost to switch | Around $600 |
| Break-even point | Under two months |
This is an illustration, not a quote. It assumes a one percentage point reduction on a $500,000 balance and typical switching costs. What you actually save depends on your balance, your current rate, your remaining term and the fees on your particular loan. If the break-even lands inside six to twelve months, refinancing is usually worth doing on the numbers alone.
Want your own break-even figure rather than an example? Bring your last statement.
Work out your savingsOptions
Strategic refinancing options
Switching lenders is only one of four moves available to you, and it is not always the right one. Sometimes the best result comes from your existing bank.
| Strategy | How it works | Main benefit |
|---|---|---|
| Internal refinance, or repricing | We go to your current bank with market data and push for a reduction, without moving the loan anywhere. | Almost no paperwork, no switching costs, and the saving starts straight away. |
| External refinance | We move your loan to a lender offering sharper pricing or the features your current loan lacks. | The largest rate improvement, plus access to cashback offers and more workable servicing policy. |
| Cash-out refinance | We increase your loan limit against an updated valuation to release equity as usable cash. | Funds for an investment, a renovation or a buffer, without having to sell anything. |
| Debt consolidation refinance | We fold high-interest card and personal loan debt into the mortgage at a much lower rate. | A single, substantially lower monthly commitment and far simpler cash flow. |
A word on consolidation. Moving short-term debt into a mortgage lowers what you pay each month, but it also stretches that debt over the remaining life of the loan, which can mean paying more interest overall even at a lower rate. Done deliberately, with a plan to pay the consolidated portion down faster, it works well. We will show you both numbers before you decide, not just the one that looks better.
How it works
Our four-step refinancing process
We manage the whole transition, including the conversations with your current lender, so you are not the one sitting on hold.
01
Mortgage health check
We benchmark your current rate against 40+ lenders, and go to your existing bank first to see what they will do to keep you.
02
Structure and capacity
We order upfront valuations and confirm your borrowing capacity under the serviceability buffer that applies today.
03
Application and approval
We package the application cleanly so it moves quickly through to formal approval, rather than bouncing back for more documents.
04
Discharge and settlement
We handle the discharge paperwork with your old lender and coordinate settlement so the switch happens quietly in the background.
Questions
Frequently asked questions about refinancing
Will refinancing affect my credit score?
A single refinance application creates one standard credit enquiry, and the short-term effect of that is minor. What does cause damage is firing off several applications at once to different lenders, which is exactly why it pays to work out the right lender first and apply once.
What is the serviceability buffer?
Regulators require lenders to assess whether you could still afford the loan if rates rose, typically testing you at three percentage points above the actual rate. If that buffer blocks a straightforward refinance, some lenders operate refinance exception policies for borrowers with a clean repayment history, and those are worth knowing about.
Will I have to pay Lenders Mortgage Insurance again?
If your equity has grown and the loan is 80% or less of the property's current market value, no LMI applies. Above 80%, it may. This is why we order an upfront valuation before doing anything, so you know where you stand rather than finding out late in the process.
Where to from here
Ready to stop paying the loyalty tax?
Let us run your actual numbers and see what repricing or refinancing would put back in your pocket each month. If the answer is that you are already on a good deal, we will tell you that too.
No obligation, and no credit check just to have the conversation.
Level 28, 140 St Georges Terrace, Perth WA 6000
Get directions
Monday to Friday, 9am to 5pm
Where to from here
Start with a straight answer.
One short conversation is usually all it takes to know where you stand and what your options actually are. Nothing to fill in first, no obligation at the end of it, and if the answer is no, I will tell you that and what would need to change.
Monday to Friday, 9am to 5pm. Perth CBD, or by phone and video anywhere in Australia.