Case Study: Refix turned Refinance – Different banks have different products
- TheLendingTeam
- May 28
- 2 min read
A fixed rate renewal is a great opportunity to explore if a refinance is beneficial however, there are a range of factors our financial advisers must consider.
In April 2025, our clients home loan ~$610,000 was coming off it's fixed rate of 6.98%, our team helped them compare their options staying with their current home loan provider or refinancing to another.
While their preferred fixed term rate of 1 year was competitive between the banks at 5.15%, there were two main advantages our clients had in refinancing:
Cash Contribution of $5,100
They had been with their current provider for more than 5 years and had no potential cash contribution clawback.
Offset Home Loan Product
This product would assist with their personal goals of utilising current savings to save interest on their home loan and repay their home loan faster. Their current home loan provider did not offer an offset product, and they were not comfortable using an alternative product known as a revolving credit facility.
Additionally, due to the nature of their application, refinancing to this specific home loan provider would not incur legal fees.
Our client refinanced and decided to split their home loan into two portions:
(1) Term loan $590,000 fixed at 5.15% over a 25-year loan term
(2) Offset Loan $12,000 over a 10-year loan term
As their savings were equal to the offset loan balance, our clients would pay no interest on this portion of their home loan. However, as they would continue to have fortnightly repayments this would go towards repaying the principal of their offset loan helping to repay their loan faster. Additionally, we reduced the loan term to 10 years further accelerating their debt repayment while keeping their preferred budget in mind.
This is a reminder that not all banks have the same products, and not all loan products suit all homeowners. While a fixed rate renewal is an opportunity to explore if a refinance is appropriate, there are a range of factors our advisers consider including affordability, personal goals, lending history, product preferences, potential fees such as legal, cash contribution clawback, break fees and more. Before hitting that refix button, seek specialised financial advice.
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