What you actually pay when you refinance your home loan
Most lenders don't charge an application fee when you refinance. The main costs you face are discharge fees from your current lender, valuation fees, and possible settlement fees from your new lender. Some lenders waive valuation fees as part of a refinance offer, and a handful cover your discharge costs to win your business. Knowing which fees are genuinely unavoidable and which ones you can negotiate or skip outright makes the difference between a $1,500 refinance and a $300 one.
Consider a FIFO operator on a $650,000 mortgage who locked in a fixed rate three years ago at 2.39 percent and is now rolling onto a variable rate above 6 percent. The rate difference alone costs roughly $290 extra per month in repayments. Refinancing to a lower variable rate at current market levels could bring repayments down by $200 to $250 per month depending on the lender. The operator's existing lender charges a $350 discharge fee. The new lender offers no application fee, waives the valuation because the property was valued within the last two years, and charges a $150 settlement fee. Total cost to switch is $500. The monthly saving covers that outlay in two months.
Do all lenders charge application fees for refinancing
No. Most mainstream lenders and non-bank lenders do not charge an upfront application fee when you refinance your home loan. A small number of lenders still list application fees ranging from $250 to $600, but these are usually waived during promotional periods or negotiated away by a broker. The real costs sit elsewhere: discharge fees charged by your current lender, valuation fees, and settlement or establishment fees at the new lender.
Your current lender will almost always charge a discharge fee to release the mortgage. This typically ranges from $300 to $400. If your loan is still within a fixed rate period, you may also face break costs, which can run into thousands depending on how much time remains and how far rates have moved. If you're coming off a fixed rate and refinancing within 30 days of expiry, break costs usually don't apply.
Some lenders waive valuation fees if you refinance with them and the property has been valued recently or if the loan amount is under a certain threshold. Others charge between $200 and $400 depending on the property type and location. Settlement fees at the new lender range from zero to $250. Adding it all up, a straightforward refinance with no fixed rate break costs typically lands between $500 and $800 in total fees.
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How to reduce or remove refinance costs
Ask your broker to compare lenders offering fee waivers or cashback offers. Several lenders run periodic campaigns where they cover discharge fees up to $500 or waive valuation costs for refinance applicants. Cashback offers can range from $2,000 to $4,000 depending on the loan amount and lender. These are paid after settlement, usually within 90 days, and can more than cover your upfront costs.
If you hold an offset account or redraw facility with your current lender, confirm whether your new loan structure will replicate those features before you switch. Some FIFO workers refinance purely to access a lower rate and overlook the loss of a linked offset account, which can cost them more in lost tax efficiency than they save in rate reductions. Make sure the new loan includes the features you actually use.
Timing your refinance application to coincide with the end of your fixed rate period removes break costs entirely. If your fixed rate ends in the next 60 days, start the refinance process now so settlement occurs just after expiry. Lenders typically take three to four weeks to process a refinance application from lodgement to settlement, though this can stretch to six weeks if valuations or document requests slow things down. FIFO rosters can complicate timing if you're offshore when documents need signing, so flag your roster with your broker upfront and arrange electronic signing where possible.
When refinancing costs more than it saves
If you owe less than $200,000 on your mortgage and the rate difference between your current loan and the new one is less than 0.5 percent, the dollar saving per month may not justify the effort or cost. For example, a $180,000 loan switching from 6.2 percent to 5.8 percent saves roughly $65 per month. After paying $600 in refinance costs, you break even after nine months. That's not a poor outcome, but it's also not compelling if your current lender offers a retention rate that gets you within 0.2 percent of the market without switching.
If your current loan includes features you rely on such as free extra repayments, redraw with no conditions, or a high offset limit, and the new loan restricts those features or adds monthly account fees, the headline rate difference can be misleading. Some packaged loan products advertise low headline rates but charge $395 annual package fees or limit offset accounts to one per loan. Read the comparison carefully.
Break costs on a fixed loan with more than 18 months remaining can run into five figures depending on how much rates have fallen since you locked in. If you fixed at 5.5 percent two years ago and rates have since dropped, your lender calculates the break cost based on the difference between your fixed rate and the current wholesale funding rate for the remaining term. In some cases that figure exceeds $10,000. Your broker can request a break cost estimate from your lender before you commit to refinancing. If the break cost is higher than two years' worth of interest savings, wait until closer to expiry unless you have another reason to refinance such as accessing equity or consolidating debt.
What FIFO income shading does to your refinance borrowing capacity
Lenders assess your income differently depending on whether your allowances and overtime are guaranteed or irregular. FIFO workers often earn a base salary plus site allowances, shift loadings, and overtime. Most lenders shade non-guaranteed income when calculating how much you can borrow. Suncorp applies 80 percent shading to overtime and allowances for non-essential services workers, which includes FIFO roles in mining, resources, and construction, provided the income has been earned continuously for at least six months. Ubank shades regular PAYG overtime and shift allowances to 80 percent, and treats irregular annual bonuses at 50 percent if verified over one year or 80 percent if verified over two years.
This shading can reduce your assessed income by several thousand dollars per year, which in turn reduces your maximum borrowing capacity and increases your debt to income ratio. Under APRA changes introduced in early 2026, banks are restricted on loans where total debt exceeds six times gross annual income. If your income is shaded and your DTI ratio is pushed above that threshold, mainstream banks may tighten serviceability, reduce the maximum loan amount, or decline the application. Non-bank lenders regulated by ASIC rather than APRA are not subject to the same DTI portfolio caps, which gives them more flexibility to approve loans that breach the six times income threshold.
If you're refinancing to access equity for an investment property or to consolidate debt, and your total borrowing after the refinance pushes your DTI ratio above six, your broker may need to structure the application with a non-bank lender or split the loan across two lenders to keep each individual facility under the threshold. This adds complexity but keeps the refinance viable when a single mainstream lender would decline.
How long a refinance application takes for FIFO workers
Most refinance applications settle within four to six weeks from lodgement. The lender orders a valuation within the first few days, which takes one to two weeks depending on how busy valuers are in your area. Once the valuation comes back and your income documents are verified, formal approval is usually issued within 48 to 72 hours. Settlement is then scheduled for a date that suits you, typically two to three weeks after formal approval.
FIFO rosters can stretch this timeline if you're offshore when the lender requests additional documents or when settlement paperwork needs signing. Most lenders accept electronic signing, but some still require wet signatures for certain mortgage documents. Let your broker know your roster pattern upfront so they can schedule lodgement and settlement around your time onshore. If you're mid-swing when formal approval is issued, your broker can usually hold settlement for up to 90 days without the approval lapsing, though some lenders limit this to 60 days.
If your current loan is with a major bank and your new loan is with a different major bank, settlement typically occurs on the same day with funds transferred electronically. If your new lender is a non-bank or smaller institution, allow an extra two to three business days for funds to clear between institutions. Your current lender will calculate final interest and discharge the mortgage once they receive the payout amount from your new lender. You'll receive a final statement showing the payout figure, accrued interest, and discharge fee within a week of settlement.
Call one of our team or book an appointment at a time that works for you. We'll run through your current loan, confirm what you're actually paying in fees and rates, and show you what a refinance would cost and save based on your specific numbers and roster.
Frequently Asked Questions
Do I have to pay an application fee when I refinance my home loan?
Most lenders do not charge an application fee when you refinance. The main costs are discharge fees from your current lender, valuation fees, and settlement fees at the new lender. Some lenders waive valuation fees or offer cashback that covers discharge costs.
How much does it cost to refinance a home loan in Western Australia?
A straightforward refinance with no fixed rate break costs typically costs between $500 and $800 in total. This includes a discharge fee of $300 to $400 from your current lender, a valuation fee of $200 to $400 unless waived, and a settlement fee of up to $250 at the new lender.
How does FIFO income affect my ability to refinance?
Lenders shade FIFO allowances and overtime when calculating your borrowing capacity. Suncorp shades non-essential services overtime to 80 percent if earned for six months or more. This reduces your assessed income and can affect your debt to income ratio, which may limit your refinance options with mainstream banks.
How long does a refinance take for FIFO workers?
Most refinance applications settle within four to six weeks from lodgement. Valuations take one to two weeks, and formal approval follows within 48 to 72 hours once documents are verified. FIFO rosters can extend this timeline if you're offshore when documents need signing, so let your broker know your roster upfront.
When should I not refinance my home loan?
If you owe less than $200,000 and the rate difference is less than 0.5 percent, the monthly saving may not justify the cost. If you're still in a fixed rate period with more than 18 months remaining, break costs can exceed the interest savings. Always request a break cost estimate before proceeding.
