Your First Refinance – A Guide for Homeowners 6–24 Months After Buying

Your First Refinance – A Guide for Homeowners 6–24 Months After Buying

Your first refinance is a milestone most new homeowners aren’t prepared for. The good news? Reviewing your home loan in the first 6–24 months can unlock better rates, lower repayments, improved loan features and smarter ways to manage your money.

This guide walks you through when to consider refinancing, what lenders check and how to make your first refinance smooth and stress-free.

1️⃣ Why Your First Refinance Matters

The loan you took when you bought your home may not be the best loan for you today.
Common changes within the first 1–2 years include:

• Your interest rate drifting above competitive offers.
• Special introductory discounts expiring.
• Your equity growing as property values rise.
• Your financial situation improving.

Your first refinance is usually where the biggest savings appear.

2️⃣ When Should You Consider Your First Refinance?

Most homeowners should review their loan:

• 6–12 months after settlement if rates are moving.
• 12–24 months after settlement as a standard check-in.
• Whenever your lender increases your variable rate.
• When your introductory rate expires.

If you’re unsure, a quick comparison will tell you whether you’re still getting a sharp deal.

3️⃣ What Lenders Check During a First Refinance

A refinance involves a fresh assessment. Lenders will want to see:

• Income: PAYG, self-employed or rental income.
• Living expenses: A snapshot of your last 3 months.
• Other debts: Credit cards, personal loans, HECS/HELP, car loans.
• Repayment history: On-time mortgage payments help a lot.
• Your property value: Determines your equity and borrowing power.

If you’ve been managing your loan well, your first refinance is usually very smooth.

4️⃣ How Much Could You Save by Refinancing Early?

Savings vary depending on:

• Your current rate vs available market rates.
• Your loan size and loan type.
• Whether your introductory discount has expired.

Even a small drop like 0.30%–0.50% on a $550,000 loan can mean hundreds of dollars a month saved — and thousands over a few years.

5️⃣ What If Your Equity Is Still Growing?

If you bought with a small deposit or used a government guarantee, your equity might still be catching up. You may need:

• A valuation to confirm your current property value.
• Your LVR at or below 80% to avoid LMI.

Even if your equity isn’t high enough yet, a broker can help you review and plan for when it will be.

6️⃣ How to Prepare for Your First Refinance

A few small steps can make the process faster:

• Keep repayments clean: Avoid missing any mortgage payments.
• Minimise BNPL usage: Afterpay, Zip and Klarna raise questions.
• Reduce unused credit limits: Lower card limits if possible.
• Track spending for 3 months: Consistent habits look stronger on paper.

Your financial conduct matters more in the first refinance than future ones.

7️⃣ Common Mistakes First-Time Refinancers Make

Watch out for:

• Choosing a loan because of a cashback (not long-term value).
• Restarting the loan back to a fresh 30-year term.
• Not comparing multiple lenders.
• Focusing only on the interest rate (features matter too).
• Leaving it too late and landing on your bank’s expensive revert rate.

Avoiding these traps can save you thousands over the next few years.

8️⃣ Should You Fix, Go Variable or Split?

Your first refinance is a good time to choose the structure that suits your life:

• Variable: Flexible, often cheaper, good for offset use.
• Fixed: Predictable repayments.
• Split loan: A balance of certainty and flexibility.

Your goals, budget and risk comfort determine the right mix.

9️⃣ What If Your Situation Has Changed Since You Bought?

Changes like a new job, higher income, reduced debts or growing savings can improve your approval chances.

If your finances have become more complex, a broker can match you with lenders who are flexible with your situation.

🔟 Make Your First Refinance Work for You

Your first refinance sets the tone for how you manage your home loan going forward.
A broker can help by:

• Comparing your current loan with better deals.
• Assessing your equity and borrowing capacity.
• Explaining whether now is the right time to switch.
• Showing how much you could save over the next 12–24 months.