Refinancing a home loan when you are self-employed involves two separate questions: does the proposed change improve the loan on terms that matter to you, and can the lender assess your current financial position? A lower advertised rate does not answer either question on its own.
This guide focuses on reviewing an existing personal residential mortgage without adding cash-out or other debts. It compares staying, asking the current lender to reprice, and switching lenders. It does not estimate borrowing capacity or establish eligibility.
What are you asking the refinance to change?
Write down the purpose first: reducing interest, changing features, changing repayment commitments or addressing an approaching fixed-rate expiry. Those objectives can lead to different comparisons.
ASIC Moneysmart suggests asking your existing lender for a better deal and checking whether switching benefits outweigh its costs. A repricing request is worth including as an option; it is not a promise that the lender will agree.
Keep the existing balance and remaining term visible. If a new proposal adds borrowing or lengthens the term, identify that separately instead of attributing the whole repayment change to its rate.
Which costs and features belong in the comparison?
Ask for the current loan details, any proposed repricing terms and the alternative loan's terms on the same date. For each option, record the amount borrowed, repayment type and frequency, remaining term, rate assumptions and features you actually use.
Moneysmart explains how Key Facts Sheets help compare costs, while warning that they do not cover every feature or condition. Check offset and redraw arrangements, extra-repayment restrictions and what happens when an introductory or fixed period ends.
Separate one-off costs from ongoing charges. Ask which discharge, break, application, valuation, registration or other charges apply, and whether mortgage insurance is relevant. Westpac's public refinance guidance, for example, distinguishes its own fees from possible costs charged elsewhere. Its list is not a fee quote for another lender.
For every amount, mark it as confirmed, estimated, not applicable or unknown. Also record whether it is paid from your cash or added to the new loan. An unknown break cost must not quietly become zero.
A hypothetical comparison: the lowest rate is not the whole answer
This is an invented arithmetic example, not current pricing, a client case or a lending offer. All three options start with $520,000 owing and a 20-year remaining term. The comparison looks at the next 24 months.
The model assumes principal-and-interest repayments at each month's end, interest calculated monthly at the annual rate divided by 12, and rates unchanged throughout the example. There is no offset balance, redraw, extra borrowing or extra repayment. The only fees included are the invented amounts below, paid upfront from cash rather than financed; all other fees are assumed zero solely for this example. Actual loan calculations and charges can differ.
- Keep the current loan: assumed rate 6.50% a year and no modelled fees. Monthly repayment about $3,876.98; total cash outflow about $93,048 over 24 months; interest over 24 months about $65,950; balance after 24 payments about $492,903.
- Reprice with the current lender: assumed rate 6.10% and no modelled repricing fees. Monthly repayment about $3,755.50; total cash outflow about $90,132 over 24 months; interest over 24 months about $61,820; remaining balance about $491,688.
- Switch lenders: assumed rate 5.90% and $2,300 in upfront switching costs. Monthly repayment about $3,695.50; total cash outflow including the upfront costs about $90,992 over 24 months; interest over 24 months about $59,757; remaining balance about $491,065. Interest plus the specified fees is about $62,057.
On these assumptions, switching has the lowest repayment and leaves the smallest balance. Yet repricing has about $238 less interest plus specified fees over the chosen two years. Switching also uses about $860 more cash over those two years while leaving about $623 less debt than repricing. These results do not determine the best loan: the fees, rate path, features, assessment and how long the loan is kept still matter.
Principal repayments reduce the debt; they are not interest expense. Compare cash leaving the account, interest and fees, and the remaining debt as separate outputs. A longer new term can lower the repayment while leaving more debt outstanding. Moneysmart's loan-term explanation describes that trade-off.
What changes because you are self-employed?
The cost comparison does not establish whether a proposed lender will accept your income. Westpac's application guidance considers income records alongside liabilities, assets and serviceability. The relevant lender must confirm its own evidence and assessment requirements.
Explain what has changed since the existing loan was assessed: the business or entity, the income sources, the periods covered by available records, and any new commitments. These are practical discussion prompts, not a universal list of lender requirements.
For example, a company owner may have a current salary record but want dividends considered too. That is an income-evidence question, not a reason to add both figures automatically. Use the business-income guide to separate the amounts and the assessment-pathways guide to understand the evidence discussion.
Your previous approval and repayment history do not establish a new lender's decision. Ask which current records and explanations it needs; the document checklist can help organise them without duplicating a new application pack here.
When is the comparison still incomplete?
Keep the conclusion provisional if a cost, feature, income requirement or decision remains unresolved. A useful next-step note has four lines:
- Loan comparison: the same starting balance, term and comparison period, with any differences disclosed.
- Costs: confirmed amounts, estimates and unknowns, including how each will be paid.
- Evidence: the current income sources, matching records and explanations still needed.
- Decision and next action: what the lender has actually confirmed, what remains conditional and who will clarify it.
If an indicative or conditional decision is involved, our pre-approval guide explains why submitting evidence does not itself clear a condition. A repayment calculation is not an approval or confirmation that a refinance has settled.
Flexdoc's residential lending service can discuss the proposed refinance and available income evidence. Book a conversation with the current loan details and the questions you want resolved.
This is general educational information, not personal credit, financial, tax or legal advice. The example does not recommend a lender or establish savings, affordability or approval for an individual borrower.