Planning to refinance?

10 questions to ask your mortgage broker before refinancing

Refinancing can be a smart move. It may help you save money, reduce your loan term or unlock better features. However before signing a new agreement, it’s critical to ask the right questions. Here are ten things to cover with your mortgage broker before refinancing.

1. What are the costs involved?

Refinancing isn’t free. Ask about discharge fees from your existing lender, application fees for the new loan, valuation costs and settlement charges. Knowing these upfront helps you compare your savings against the true cost of switching.

2. What’s my property value and equity?

Your current home value affects your loan-to-value ratio (LVR), which in turn impacts how much you can borrow and at what rate. A broker can help arrange a valuation and give you a clearer picture of your equity position.

3. What interest will I really pay?

Don't just look at the advertised rate. Focus on the comparison rate, which includes fees and charges. Also, ask if the rate is an introductory – or ‘honeymoon’ – offer that will increase later, and what your repayments will look like over time.

4. Is fixed or variable the right fit?

Ask your broker to walk you through the pros and cons of fixed and variable rates. Or whether a split loan might work. Fixed rates offer stability, while variable rates may provide more flexibility and savings if rates fall.

5. What’s the term of the new loan?

Extending your loan term can reduce your monthly repayments but may increase the total interest paid over time. Alternatively, shortening your term can save you money overall, but increase your monthly obligation. Get your broker to run the numbers both ways.

6. Are there helpful features included?

Some loans include features like offset accounts, redraw facilities or the ability to make extra repayments. These can significantly reduce interest. Just make sure the benefit outweighs any added costs or fees.

7. Can I make extra repayments without penalty?

The ability to make additional repayments helps you pay down your mortgage faster and save interest. Make sure your new loan allows this. Check if there are restrictions on how much or how often you can pay extra.

8. What are the qualification requirements?

Each lender has different criteria, but most will want to see stable income, a good credit history and a healthy equity position. Ask your broker what documentation you’ll need and if there are any potential red flags in your profile.

9. Are you a licensed broker?

It might sound obvious but always check that your broker is licensed. ASIC maintains a register of qualified brokers. Working with a professional ensures you’re getting compliant, informed guidance, not a product push.

10. How are you paid?

Ask your broker how they’re compensated. Some receive a flat fee regardless of lender and some receive a commission-split structure, while others may be paid more for presenting certain loan products. Transparency builds trust and helps you feel confident that the advice is in your best interest.