The refinancing process starts by reviewing the fees charged by your current lender for changing loans. Then, exploring different home loan options to identify a more favorable deal. If you choose to proceed with refinancing, a formal loan approval needs to be secured with the new lender.

If you opt to renegotiate with your current lender, the process is generally more straightforward, but you may need to prove your capacity to repay the loan.

Equity refers to the portion of your property that you truly own, which is calculated by taking the total market value of the property and subtracting any outstanding debts or loans secured against it.

For example, if your home is valued at $300,000 and you have a mortgage balance of $200,000, your equity in the property would be $100,000. This equity can increase over time as you pay down your mortgage or as the value of your property appreciates in the real estate market.

When refinancing with a different lender, it is important to be aware that you may incur discharge fees or break fees, depending on your current home loan and lender. Furthermore, you should take into account any associated costs that may arise when securing a new loan, including application fees and property or valuation fees. Nevertheless, these expenses may appear minor in comparison to the potential savings achieved through refinancing.

The amount of money you can borrow during the refinancing process depends on your current borrowing capacity. This capacity is affected by current interest rates and the difference between your income and expenses. Furthermore, the property’s value is crucial; borrowing more than 80% of the property's value typically requires Lenders Mortgage Insurance (LMI), which increases your overall borrowing costs.