There is no hard and fast rule.  However, you should regularly check if your home loan is still competitive at least every 12 months.  This can only be done by testing what other lenders will offer you.

In Australia, home loan lenders quote a 'standard variable rate' that will change over time.  They have sole discretion in determining this rate. They also have no obligation or incentive to determine if you are still in the most suitable loan for you.  This means that if you have not reviewed it in the past 12 months, you have a high risk of paying an expensive interest rate.

It is possible to refinance your loan to a better rate by merely asking your existing lender.

It is also possible to do a lot of research yourself online on possible interest rates.

However, most people will be highly unlikely to gain the confidence that they have obtained the best rate in the market by themselves.

Most people are also at risk of negatively impacting their credit scores by submitting a loan application without adequately understanding the credit policies of the lender.

LoanCaddie's value add is:

• We have discussions with lenders every day regarding various and anonymous borrowers.  These discussions cannot be had directly between borrower and lender;

• We discuss credit policy scenarios with lenders to ensure applications have the best chance of being approved;

• We are able to negotiate with lenders more effectively given we know their weakness.

At the end of the day, it is confidence regarding the suitability of product, pricing and process that we provide to our clients.

LoanCaddie makes it easy for you to refinance by systematically matching you with the best loan from our panel of lenders based upon your financial situation and objectives.  Our online process takes out the hassle of having to provide paperwork and filling out a large number of forms.

• 11% of people are savvy with their finances and refinance every year.

• 49% of people refinance every 1-5 years.  

• 39% of people never refinance and are at high risk of paying an expensive interest rate.

There are several factors that lenders consider when changing their standard variable rate.  Gone are the days where changes only reflect the change to the RBA's overnight cash rate.   These factors include the lender's own borrowing costs, their overhead costs and return targets for their shareholders.  These factors impact lenders in different ways and at different times.

Lenders are no longer allowed charge unreasonable switching fees that make it harder to change lenders.  The only fees that are charged typically are:

• Discharge fee - This is charged by the existing lender to cover the cost of filing mortgage documents.  This should have been disclosed to you when you originally took out your loan and is generally in the range of $100-$400;

• Application fee (if any) and Settlement costs  - An application fee is charged by the new lender.  Settlement costs (lender's legal costs) are either borne by the lender or passed onto the borrower.

• Valuation costs - This is the cost to obtain a property valuation. In most circumstances, this is borne by the new lender.