Refinancing means switching your existing mortgage to a different loan, usually to access a lower interest rate or unlock features your current lender doesn't offer.
Most FIFO mobile plant operators who refinance do it for one of three reasons: their fixed rate period has ended and they're now on a higher variable rate, they want to pull equity out to fund another purchase, or they've realised their current loan is costing more than it should. Knowing which camp you're in shapes how you approach the process and what you ask for.
When coming off a fixed rate makes sense to switch
If your fixed rate period is ending, you'll roll onto your lender's standard variable rate unless you do something about it. That revert rate is often higher than what new customers get offered, sometimes by a full percentage point or more.
Consider a mobile plant operator with a loan amount of around $450,000 who locked in a fixed interest rate three years ago at 2.5%. When that fixed rate period ends, the revert rate might sit at 6.8%, while new variable rates from other lenders are closer to 6.0%. Over the course of a year, that 0.8% difference means paying roughly an extra $3,600 in interest. Refinancing before the fixed rate expiry date lets you move to a loan with a lower interest rate without waiting for the rollover to happen. You can learn more about what happens at fixed rate expiry and how to time the switch.
The other option is to lock in a new fixed rate with a different lender if you want certainty over the next few years. Just make sure the rate you're locking in actually saves you money compared to staying variable, because breaking out of another fixed term early down the track can be costly.
Accessing equity without selling
If you've owned your property for a few years and values have gone up, you might have equity you can pull out and use for other purposes. This is called equity release, and it's one of the main reasons FIFO workers refinance even when their current interest rate isn't terrible.
In a scenario like this, a mobile plant operator owns a property that's increased in value and wants to use that equity as a deposit on an investment property. Rather than saving another deposit from scratch, they refinance to a higher loan amount and take the difference as cash. The new loan might be $80,000 larger, but the property secures it, and the funds go straight into the next purchase. We see this regularly with operators looking to expand their property portfolio while still working on site. The key is making sure the rental income from the new property covers most or all of the increased repayment, so your cashflow doesn't take a hit during your roster.
You can also release equity to consolidate other debts, fund renovations, or cover large expenses. Just keep in mind that pulling equity out increases your loan amount, so your repayments will go up unless you extend the loan term to spread the cost.
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How the refinance process actually works
The refinance application follows the same steps as applying for a new home loan. You'll need to provide proof of income, and for FIFO workers that means payslips covering your full roster cycle, plus your employment contract if you've been in the role for less than two years. Lenders will also want to see statements for any accounts you hold, a current property valuation, and details of your existing loan.
The valuation is usually ordered by the new lender, and it determines how much equity you have available. If the valuation comes in lower than expected, you might not be able to borrow as much as you planned, or you could end up needing to pay lenders mortgage insurance if your loan-to-value ratio crosses 80%.
Once the loan is approved, the new lender handles the payout of your old loan and registers the new mortgage. The whole process typically takes three to five weeks from application to settlement, depending on how quickly the valuation comes back and whether any documents need clarification. You'll stay with your current lender until settlement day, so there's no gap in your repayments.
Switching lenders to improve loan features
Sometimes the rate isn't the issue, but the loan itself doesn't do what you need it to. You might want an offset account to park your income between rosters, or you need redraw access for emergency funds, and your current lender either doesn't offer it or charges extra for it.
An offset account can make a real difference if you're paid fortnightly and your repayments come out monthly. The cash sitting in offset reduces the interest you're charged daily, which over a year can save you hundreds or thousands depending on how much you keep in there. Some lenders also offer features like fee-free extra repayments or the ability to split your loan between variable and fixed without opening multiple accounts.
If you're thinking about refinancing purely for features, make sure the new loan's interest rate isn't significantly higher than what you're paying now. A loan with an offset account that costs you an extra 0.3% in interest might not actually save you money unless you're keeping a large balance in that account most of the time. Run the numbers before you commit, or get someone to run a loan health check and show you the real cost over 12 months.
What refinancing costs and how to factor it in
Most lenders don't charge application fees anymore, but you'll still pay for the property valuation, discharge fees from your current lender, and sometimes settlement or legal costs depending on your state. The valuation alone can be between $200 and $400, and discharge fees vary but usually sit around $300 to $500.
If you're still within a fixed rate period and you want to refinance early, you'll also cop break costs. These are calculated based on how much interest the lender loses by letting you out of the fixed term, and they can run into the thousands if rates have dropped since you locked in. That's why most people wait until their fixed term ends, unless the savings from switching are large enough to cover the break cost and still leave them ahead.
Some lenders offer cashback deals where they'll give you a lump sum to cover refinancing costs, but those deals often come with higher interest rates over the life of the loan or clawback clauses if you leave within a couple of years. Work out whether the cashback actually puts you ahead or just delays the cost.
Consolidating debts into your mortgage
If you're carrying a car loan, personal loan, or credit card debt with high interest rates, refinancing lets you roll those into your mortgage at a much lower rate. This is called debt consolidation, and it can improve your cashflow by replacing multiple repayments with one.
The downside is that you're now paying off that debt over the life of your home loan, which might be 25 or 30 years. A $20,000 car loan that had three years left on it will cost you more in total interest if you spread it over three decades, even at a lower rate. The way around this is to keep making the same monthly repayment you were making before consolidation, but direct it all to your mortgage. That way you clear the debt faster and save on interest without stretching it out. You can read more about debt consolidation loans for FIFO workers and how they're structured.
Timing your refinance around your roster
One thing that catches a lot of FIFO workers is trying to refinance while you're on site with limited phone reception and no time to deal with paperwork. Lenders need documents signed, questions answered, and sometimes follow-up statements or letters from your employer.
Start the refinance process during your swing off, or at least make sure you've submitted everything before you head back on site. If something comes up while you're away, you'll either miss the deadline or have to deal with it over a patchy connection during your limited downtime. Most brokers who work with FIFO clients will batch requests and give you a clear list of what's needed upfront, so you're not scrambling halfway through the application.
Call one of our team or book an appointment at a time that works for you. We'll walk through your current loan, show you what's available, and handle the application around your roster so you're not chasing documents from the pit.
Frequently Asked Questions
When should I refinance my home loan?
Refinance when your fixed rate period is ending and you're rolling onto a higher revert rate, when you want to access equity for another purchase, or when your current loan is costing more than what's available elsewhere. Timing it during your swing off makes the process much smoother.
How long does the refinance process take?
The refinance application typically takes three to five weeks from submission to settlement, depending on how quickly the property valuation comes back and whether any documents need clarification. You stay with your current lender until settlement day.
What costs are involved in refinancing?
You'll pay for a property valuation, discharge fees from your old lender, and sometimes settlement costs. If you're refinancing during a fixed rate period, you'll also pay break costs based on how much interest the lender loses by letting you out early.
Can I use refinancing to access equity in my property?
Yes, you can refinance to a higher loan amount and take the difference as cash if your property has increased in value. This is commonly used to fund a deposit on an investment property or consolidate other debts.
Does refinancing always save me money?
Not always. You need to factor in the costs of refinancing and compare them against the interest savings or features you'll gain. If the new loan has a higher rate or the costs outweigh the savings, refinancing might not be worth it.
