In 2025, refinancing is on the rise. Recent figures show refinancing activity has increased by more than 5% this year, as homeowners look for smarter ways to manage their finances.
But this isn’t just about chasing a lower mortgage rate anymore. Many Australians are using refinancing as a debt optimisation strategy, combining multiple debts — like home, car, personal, or even small business loans — into one streamlined facility.
So why are so many borrowers making the move?
The Benefits of Refinancing as a Debt Optimisation Tool
Refinancing can offer several advantages beyond a cheaper home loan:
- Lower interest costs – Home loan rates are generally far lower than personal loan or car loan rates.
- Improved cash flow – Rolling debts into one facility can reduce your monthly repayments by spreading them over a longer term.
- Simplified finances – Instead of juggling multiple repayments across different lenders, you can consolidate them into one.
A Quick Case Study
Take Sarah and Michael. They had:
- A $500k home loan at 6.1%
- A $25k car loan at 9%
- $12k in personal loan debt at 11%
By refinancing their home loan to 5.4% and rolling in their car and personal loans, they:
- Saved over $450 per month in repayments
- Cut their overall interest costs by thousands over five years
- Reduced financial stress with one simple monthly payment
It’s worth noting that extending loan terms can mean paying more interest in the long run — so weighing up the short- and long-term costs is essential.
Is Refinancing Right for You?
Refinancing may be worth considering if:
- You’re on a mortgage rate that hasn’t changed in years
- You’re juggling multiple high-interest loans
- You want to unlock equity for renovations, investments, or business purposes
Even if you’re not sure, a refinancing review can help clarify your options.
The Bottom Line
Refinancing isn’t a one-size-fits-all solution — but in the right circumstances, it can be a powerful tool for improving your financial wellbeing. Understanding the potential savings and trade-offs is the first step.
