Refinancing your investment property can reduce your interest rate, unlock equity, restructure your loans across multiple properties or switch from principal and interest to interest-only repayments. This guide covers exactly when refinancing makes sense, how to compare lenders, the costs involved and the step-by-step process for Australian property investors in 2026.
When Should You Refinance an Investment Property?
- Your fixed rate period is ending and the revert rate is significantly above market
- Your property has grown in value and you want to access equity for another purchase
- You want to restructure from principal and interest to interest-only to improve cash flow
- Your lender’s serviceability assessment has changed and you now qualify for better terms
- You are consolidating multiple loans across a portfolio
Refinancing Costs to Know
| Cost | Typical Range |
|---|---|
| Discharge fee (existing lender) | $150 – $400 |
| Break cost (fixed rate) | $0 – $15,000+ |
| Application fee (new lender) | $0 – $600 |
| Valuation fee | $200 – $600 |
| Stamp duty (in some states) | $0 in most cases |
| Legal/settlement fee | $150 – $400 |
Step-by-Step Refinancing Process
- Compare investment property loan rates from at least 3 lenders
- Get a current valuation on the property
- Calculate your current LVR (loan balance divided by current value)
- Submit a refinance application with income, asset and liability documentation
- Receive formal approval and sign new loan documents
- Settlement occurs — new lender pays out old lender
How Much Can You Save by Refinancing?
On a $600,000 investment loan, reducing your rate from 6.8% to 6.1% saves approximately $4,200 per year in interest. Over a 10-year hold, that is $42,000 in pre-tax savings, before the compounding benefit of redirecting savings into offset or additional repayments.
Frequently Asked Questions
Does refinancing affect my tax deductions?
Refinancing costs (application fees, discharge fees) may be deductible over 5 years. Interest on the refinanced loan remains deductible if the funds remain for investment purposes. Consult your accountant before switching.
How long does investment property refinancing take?
Typically 2 to 6 weeks from application to settlement, depending on the lender’s assessment time and whether a new valuation is required.
Can I refinance and access equity at the same time?
Yes. If your property has grown in value, you can refinance to a higher loan amount (up to 80% LVR without LMI) and draw the equity for a deposit on your next purchase.
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