Home Loan Repayments Too High? 6 Options to Consider in 2026
If your home loan repayments are starting to feel too high, you may have more options than simply accepting the extra cost.
Your current lender may be willing to reduce your interest rate. Another lender may offer a more competitive loan. Refinancing could make sense. Or there may be ways to restructure your lending depending on your circumstances.
And right now, it is particularly worth checking.
Competition between Australian lenders has increased, with dozens of banks reducing variable home-loan rates recently as they compete for new borrowers. The catch? Existing customers don't necessarily receive those sharper rates automatically.
So, if you've had the same home loan for a while, the question is simple:
Is your current home loan still competitive?
1. Find Out What Interest Rate You're Actually Paying
Start with something surprisingly easy to overlook: your current interest rate.
Not the rate you received when you first took out the loan.
Not the rate you remember seeing in an email from your bank.
Your actual interest rate today.
You should be able to find this in your lender's app, internet banking or latest home-loan statement.
Once you know it, you have something to compare.
This matters because there's currently a significant spread between variable home-loan rates in Australia. Moneysmart says the difference between variable rates available in the market can exceed 2 percentage points.
That doesn't mean everyone paying a higher rate should immediately refinance. The rate available to you will depend on factors such as your loan size, loan-to-value ratio (LVR), credit position, property and individual circumstances.
But it does mean it's worth knowing where you stand.
Not sure whether your rate is competitive?
That's something we can help you work out.
Send Thrive your approximate:
Current loan balance + interest rate + property address
and we can review your position against the lending options available to you.
2. Ask Your Current Lender for a Better Rate
Before refinancing, there may be a much simpler option:
Ask your existing lender to sharpen your rate.
You don't necessarily need to move banks to improve your home loan.
Moneysmart recommends asking your existing lender for a better deal and comparing what they offer with alternative loans. It also notes that borrowers with greater equity and a good credit position may have more negotiating power.
This is particularly relevant in the current market.
Recent reporting has found lenders are competing aggressively for new mortgage customers, while existing customers may not automatically receive the same pricing.
So loyalty alone isn't a reason to assume you're getting your lender's most competitive offer.
Sometimes the outcome of a home-loan review isn't refinancing at all.
It can simply be:
"Your current lender can improve your rate. Stay where you are."
And that's still a good result.
3. See What Other Lenders Could Offer You
If your current lender won't move—or doesn't move enough—it may be worth comparing alternatives.
This is where things become more interesting than simply searching:
"Lowest home loan rate Australia."
The lowest advertised rate isn't necessarily the rate available to you, and the cheapest-looking loan isn't necessarily the most suitable.
Different lenders can assess the same borrower differently.
Your options may be influenced by things such as:
Your income and employment
Your loan balance
Your property's value
Your LVR
Other debts and credit limits
Whether the property is owner-occupied or an investment
Loan features you require
Your credit history
That's one of the reasons working with a mortgage broker can be useful.
Rather than asking one bank what it can offer you, we can assess your circumstances against a broad panel of lenders and determine whether there's a compelling reason to move.
4. Work Out Whether Refinancing Would Actually Save You Money
A lower interest rate sounds good.
But refinancing should ultimately leave you in a better overall position.
Consider a simplified example.
Imagine you currently have:
Home loan balance: $650,000Current interest rate: 6.49%Potential alternative rate: 5.89%Difference: 0.60 percentage points
On a $650,000 balance, that's a big enough difference to investigate.
But we still wouldn't look at the interest rate in isolation.
There may be costs associated with changing loans, including discharge fees, application or establishment costs, valuation costs and, in some situations, fixed-rate break costs or Lenders Mortgage Insurance.
Moneysmart recommends comparing these costs and calculating how long it would take for the savings from the new loan to recover the cost of switching.
That's your break-even point.
If refinancing costs you $1,500 but saves you $250 per month, for example, the simple break-even period would be approximately six months.
But if the savings are tiny and the switching costs are substantial, moving lenders may not make sense.
A refinance should solve a problem—not simply create a new home loan.
5. Be Careful About Lowering Repayments by Extending Your Loan Term
There's another way a new loan can appear cheaper.
Imagine you've already spent seven years paying down a 30-year mortgage.
You refinance the remaining balance into a new 30-year loan.
Your required monthly repayment might fall.
Great?
Not necessarily.
You've also potentially added another seven years to the time it takes to repay your home.
Moneysmart warns that extending your loan term can result in paying more interest overall, even where the immediate repayment looks more manageable.
That's why we look beyond:
"What's my new monthly repayment?"
We also want to understand:
"What will this loan cost me over time?"
Depending on your circumstances, retaining a similar remaining loan term—or continuing to make higher repayments after obtaining a lower rate—could produce a very different long-term result.
6. Review Your Other Debts at the Same Time
Your mortgage may not be the only repayment putting pressure on your monthly cash flow.
You might also have:
A car loan
Personal loan
Credit cards
Buy Now Pay Later accounts
Other debts
In some circumstances, refinancing provides an opportunity to review the broader lending structure.
But debt consolidation needs to be approached carefully.
Moving short-term debt onto a home loan may reduce the interest rate or immediate repayment, but stretching that debt across a much longer period can actually increase its total cost.
It can also turn unsecured debt into debt secured against your home.
Moneysmart specifically warns borrowers to compare the total cost and term, not simply the new interest rate or weekly repayment.
So this isn't simply about putting every debt into the mortgage.
It's about determining whether restructuring genuinely improves your position.
What If I'm Actually Struggling to Make My Home Loan Repayments?
There's an important difference between:
"My home loan feels expensive and I want a better deal"
and
"I'm worried I won't be able to make my next repayment."
If you're experiencing genuine financial hardship, contact your lender's hardship team as early as possible.
Your lender may be able to offer a hardship arrangement, which could include temporarily reducing or pausing repayments or changing your loan terms. Moneysmart says lenders must consider requests for financial hardship assistance, and seeking assistance earlier can mean more options are available.
If you need independent assistance with financial difficulty, you can also contact the National Debt Helpline for free financial counselling.
How Do I Know If I'm Paying Too Much on My Home Loan?
There isn't one interest rate that every borrower should be paying.
A competitive rate for one borrower may not be available—or appropriate—for another.
Instead, we'd look at things like:
Your current rateWhat are you actually paying?
Your loan balanceA small rate difference can become significant on a large mortgage.
Your property valueIf your property has increased in value or you've reduced your balance, your LVR may have improved.
Your remaining loan termWe don't want to create apparent savings simply by resetting your mortgage to another 30 years.
Your loan featuresOffset accounts, redraw, fixed/variable structures and other features can matter.
The cost of changingA better rate needs to justify the expense and effort involved.
Only then can you properly compare staying with your existing lender against refinancing.
Frequently Asked Questions
Is it worth refinancing for a 0.5% lower interest rate?
Potentially. Moneysmart notes that even a 0.5 percentage point lower rate can save thousands of dollars over time, but whether refinancing is worthwhile depends on your balance, remaining loan term, switching costs and circumstances.
Can I ask my bank for a lower home loan rate without refinancing?
Yes. You can ask your existing lender to review your interest rate without moving your home loan. If they won't offer a competitive deal, you can then compare alternatives.
How often should I review my home loan?
There's no mandatory schedule, but it's sensible to check your loan periodically and after significant changes to your financial circumstances, property value or the lending market.
A review also doesn't mean you have to refinance.
Does refinancing restart my home loan at 30 years?
Not necessarily. You can consider a new loan term that reflects the remaining term of your existing mortgage. Extending the term can reduce required repayments but may increase the total interest you pay.
Can a mortgage broker negotiate my current interest rate?
A broker can review your existing lending, compare alternatives and discuss the options available to you. Depending on the circumstances, the most appropriate outcome may be refinancing—or remaining with your current lender.
How much does it cost to refinance a home loan?
It varies. Potential costs can include discharge, application, valuation and other lender/government charges. Fixed-rate loans may also involve break costs. These should be compared against the expected benefit before switching.
Want to Know If Your Home Loan Is Still Competitive?
You don't need to know which lender you want.
You don't need to have decided to refinance.
And you don't need to spend your weekend comparing dozens of home loans.
Start with three numbers:
1. Your approximate loan balance2. Your current interest rate3. Your approximate property value
Send them to Thrive Financial Group and we can review your current position, look at what options may be available and explain whether it's worth taking things further.
If your existing loan still makes sense, we'll tell you.
If there's an opportunity to improve it, we'll show you what that could look like.
Get in touch with Thrive Financial Group to start your home-loan review.
General information only. This content does not take into account your individual objectives, financial situation or needs. Lending criteria, fees, rates and eligibility requirements vary between lenders and are subject to change.
