Stamp duty and refinancing

A quick recap on stamp duty

Put simply, stamp duty is a state tax that’s typically placed on high value purchases such as buying an owner-occupied or investment property, transferring property, or paying for a car registration.

The amount you pay on stamp duty depends on the state or territory you’re in, the value of your home and the type of property.

Each state and territory has its own regulations to follow, so we recommend clicking the link to your local State Revenue Office for further information:

• NSW Stamp Duty
• QLD Stamp Duty
• VIC Stamp Duty
• SA Stamp Duty
• TAS Stamp Duty
• WA Stamp Duty
• ACT Stamp Duty
• NT Stamp Duty

Will I need to pay stamp duty when refinancing my home loan?

You may have to pay stamp duty when refinancing your home loan if you switch to a home loan with a larger balance than the principal of your previous loan.

In some cases, borrowers may be eligible for a stamp duty exemption.

For example, in Victoria, if you’re refinancing your first home, or the value of your home is less than $600,000, you may be exempt from paying stamp duty in your home loan refinancing costs.

If you aren’t eligible for an exemption, you may also be eligible for a stamp duty concession if you satisfy certain criteria such as being a pensioner, or buying a home under a certain value.

Similar rules apply in each state and territory.

Are there other ways to avoid paying stamp duty when refinancing?

There are some circumstances in which you could avoid it, including:

• If the name of the borrower and the loan amount stay the same
• If you refinance with the same lender
• If you pay the stamp duty and are eligible for a refund from the lender.

These circumstances vary between lenders, so it’s best to ask your chosen lender if you could be eligible for any other exemptions or concessions.

What other fees are associated with refinancing a home loan?

Here are some important factors you may want to consider when you’re figuring out whether refinancing will suit you and your situation:

• Fixed or variable Is the new product a fixed rate or variable rate product? And does the lender offer the ability to split the loan into half fixed, half variable?
• Break-fees These are the fees you’ll need to pay to your existing lender to break your mortgage contract. They typically only apply for breaking the terms of a fixed rate home loan (e.g. by refinancing before the end of the fixed period).
• Any new fees These are any setup, administrative, valuation, or ongoing service fees charged by your new lender.
• Loan term The longer the loan term, the more interest you could end up paying, so switching to a loan with a shorter term could help you save.
• Payment frequency It’s important to check that your repayment frequency aligns with your cash flow to ensure you’re not hard-pressed to manage your repayments.
• Additional features Different loans come with different features, such as offset accounts and redraw facilities, which can add flexibility to your loan, and even help you minimise interest repayments. For this reason, it’s important to know you’re not foregoing any features that you value when switching products.
• Lender’s Mortgage Insurance (LMI) If your loan to value ratio is over 80% then you may need to pay Lender’s Mortgage Insurance again with your new lender, as it’s not typically transferrable.

How can I compare options?

If you’re thinking about refinancing your home loan, why not get started with iSelect. We’ve partnered with Lendi to help you compare a range of home loans and switch to a product that suits you.* Get started from 25+ lenders online, or give Lendi a call on 1300 186 260 (8:30 – 10:30).

Updated Last: 10/06/2022