Can I Refinance with a Broker in Melbourne and What Costs Apply?

By Lowest Interest Rates Australia

Introduction

When I bought my first home in Melbourne, refinancing was the last thing on my mind. I was just thrilled (and slightly terrified) to have my own place. Fast forward a few years—interest rates shifted, new lenders entered the market, and I started hearing friends brag about saving hundreds a month after refinancing. That’s when I thought, “Maybe I should look into this broker thing.”

Turns out, refinancing with a mortgage broker in Melbourne was one of the smartest financial decisions I ever made. Not only did my broker handle all the heavy lifting, but they also helped me understand every cost, saving, and step involved—without me spending a cent on their services.

If you’re wondering whether you can refinance through a broker (spoiler: you can!) and what costs apply, this guide breaks it all down in simple, relatable terms. Let’s dive in and see how you can save money, reduce stress, and make your home loan work harder for you.

Table of Contents

1. What Does It Mean to Refinance a Home Loan?
2. How a Mortgage Broker Helps with Refinancing
3. Why Use a Broker Instead of Going Direct to a Bank?
4. What Costs Apply When Refinancing in Melbourne?
5. Key Benefits of Refinancing with a Broker
6. When Is the Best Time to Refinance?
7. Step-by-Step: How the Refinancing Process Works
8. Case Study: How a Melbourne Broker Helped a Homeowner Save Big
9. Tips to Minimise Refinancing Costs
10. Final Thoughts – Work with Lowest Interest Rates

What Does It Mean to Refinance a Home Loan?

Refinancing means replacing your existing mortgage with a new one—either with a different lender or on new terms with your current bank. The goal? Usually to secure a better rate, reduce repayments, access equity, or restructure your loan to better fit your financial goals.

Think of it like trading in your old phone for a newer model that’s faster, cheaper, and has more features. You’re still making calls (paying your mortgage), but the experience is far smoother and more rewarding.

For Melbourne homeowners, refinancing has become increasingly common. With fluctuating interest rates and lenders competing fiercely for customers, it’s often possible to shave thousands off your total loan costs—especially when guided by an experienced mortgage broker.

How a Mortgage Broker Helps with Refinancing

A mortgage broker acts as your personal finance expert and loan negotiator. They don’t just find you a better interest rate—they compare dozens of lenders, handle the paperwork, and tailor the loan to your goals.

Here’s what a broker typically does when you refinance:

• Reviews your current loan: Analyses your current interest rate, fees, features, and remaining term.
• Identifies your goals: Do you want lower repayments, more flexibility, or access to home equity?
• Compares lenders: Brokers have access to dozens of banks and non-bank lenders, many offering broker-exclusive deals.
• Negotiates better terms: They use their relationships with lenders to secure discounts or fee waivers.
• Handles paperwork and communication: From valuation to settlement, the broker manages it all for you.
• Ensures suitability: They recommend loans that meet your financial situation and future plans—no guesswork required.

In short, a broker is your mortgage matchmaker and advocate rolled into one.

Why Use a Broker Instead of Going Direct to a Bank?

Going directly to your bank may feel convenient—but it can also limit your options. Your bank will only offer you its own products, even if a better deal exists elsewhere.

Here’s why brokers are often the smarter choice:

• More options: Brokers can access over 30+ lenders, not just one.
• Expert advice: They understand Melbourne’s lending landscape and tailor recommendations accordingly.
• No cost to you: In most cases, brokers are paid a commission by the lender—not you.
• Better negotiation power: Lenders compete for broker-introduced clients, often resulting in sharper rates or waived fees.
• Time savings: Instead of making multiple appointments, your broker does all the research and comparisons for you.

Think of it like having a personal shopper for your home loan—someone who knows every deal in town and helps you walk away with the best one.

What Costs Apply When Refinancing in Melbourne?

Let’s be honest: refinancing isn’t completely free. But the good news? Most costs are one-time, and a good broker will help you minimise or even eliminate many of them.

Here’s a breakdown of potential refinancing costs:

1. Discharge Fee

Your current lender may charge a discharge or termination fee to close your existing loan. In Victoria, this typically ranges from $150 to $400.

2. Application or Settlement Fee

Some lenders charge an application or settlement fee for the new loan—usually between $200 and $600. Many brokers can negotiate these fees away or find lenders offering cashback deals to offset them.

3. Valuation Fee

Before approving your refinance, your new lender may require a property valuation. This can cost around $300 to $600, though many lenders offer free valuations for refinances.

4. Break Cost (Fixed-Rate Loans)

If you’re currently on a fixed-rate loan and refinance before your fixed term ends, you may incur a break fee. This can vary widely—from a few hundred to several thousand dollars—depending on rate movements and remaining time on your fixed term.

5. Mortgage Registration Fee

The Victorian government charges a fee to register or remove a mortgage—currently about $125 per transaction.

6. Lender’s Mortgage Insurance (LMI)

If your new loan’s value exceeds 80% of your home’s value, you may need to pay LMI again. However, a broker can often structure your refinance to avoid this cost if your equity position allows.

7. Ongoing Fees

Some lenders charge annual or monthly package fees (usually $250–$400 per year). A broker can help you compare whether the added features justify the ongoing cost.

Pro Tip: Many lenders now offer refinance cashback incentives—sometimes up to $2,000–$4,000—which can easily cover these expenses.

Key Benefits of Refinancing with a Broker

So, with all those potential costs, why bother? Because the long-term benefits usually outweigh the short-term expenses. Here’s what you stand to gain:

• Lower interest rates: Even a 0.5% reduction can save thousands over the life of your loan.
• Better loan features: Offset accounts, redraw facilities, and flexible repayments make managing your loan easier.
• Access to equity: Use built-up equity to fund renovations, investments, or education costs.
• Debt consolidation: Merge multiple debts into one manageable payment.
• Improved cash flow: Lower repayments free up room in your monthly budget.

In other words, refinancing isn’t just about getting a better rate—it’s about improving your financial flexibility and peace of mind.

When Is the Best Time to Refinance?

While there’s no single “perfect” time to refinance, certain situations make it more worthwhile:

• Your interest rate is higher than the current market average.
• You’ve built up equity (your property value has risen).
• Your fixed term is ending soon.
• Your income or credit score has improved.
• You’re planning major life changes—like renovations, starting a family, or investing.

Most experts recommend reviewing your home loan every 12–24 months. Even if you don’t switch lenders, a quick check with a broker ensures your loan remains competitive.

Step-by-Step: How the Refinancing Process Works

Here’s how refinancing through a broker typically works:

1. Initial Consultation: Your broker reviews your current loan, financial goals, and situation.
2. Loan Comparison: They compare dozens of lenders to find the most suitable options.
3. Cost-Benefit Analysis: The broker calculates savings, factoring in fees and cashback offers.
4. Application Submission: Once you’ve chosen a new lender, they handle the paperwork.
5. Valuation and Approval: The new lender values your property and approves the refinance.
6. Settlement: The new loan pays out the old one, and you start fresh with your new lender.
7. Post-Settlement Support: Your broker checks in to ensure everything’s running smoothly and reviews your rate periodically.

From start to finish, most refinances take 2–4 weeks, depending on lender turnaround times and property valuations.

Case Study: How a Melbourne Broker Helped a Homeowner Save Big

Let’s meet Laura, a homeowner in the northern suburbs of Melbourne. She’d been with her bank for seven years and was paying 6.6% on her mortgage. She contacted Lowest Interest Rates to see if refinancing could help.

After reviewing her situation, her broker found a lender offering 5.4% with no annual fee and a $3,000 refinance cashback. The broker handled the entire process, from comparing options to finalising settlement. Laura saved $360 per month and recouped her refinancing costs within the first two months.

Now, with the extra cash flow, she’s making additional repayments and planning minor renovations—proof that refinancing doesn’t just save money, it creates opportunities.

Tips to Minimise Refinancing Costs

• Use cashback offers: Many lenders offer incentives that cover refinance fees.
• Avoid unnecessary features: Only pay for what you’ll actually use (e.g. offset accounts).
• Bundle services: Some lenders waive fees if you open a savings or transaction account.
• Work with a broker: They can negotiate fee waivers and identify the most cost-effective lenders.
• Review regularly: Avoid getting “loyalty taxed” by checking your loan competitiveness every year or two.

Final Thoughts – Work with Lowest Interest Rates

So, can you refinance with a broker in Melbourne? Absolutely—and for most people, it’s the easiest and smartest way to do it. While there are a few costs involved, a good broker will help you avoid unnecessary fees and secure a deal that saves you money in the long run.

At Lowest Interest Rates, our Melbourne-based brokers specialise in helping homeowners refinance with confidence. We compare dozens of lenders, handle all the paperwork, and explain every step clearly—so you can focus on enjoying your savings, not stressing over fine print.

🏠 Ready to explore your refinance options? Visit LowestInterestRates.com.au today to connect with a trusted broker who can guide you through the process and find the best deal for your home loan.