Home loan repricing asks the current lender to lower a client’s rate while keeping their loan in place. Refinancing replaces that loan with a new one. Start with a rate review when the existing loan still meets the client’s needs. Compare a refinance when another loan delivers a better result after switching costs.
The commission effects differ. A straightforward repricing usually preserves trail without triggering clawback. Refinancing stops the old loan’s trail and can trigger repayment of its upfront commission. The new loan can earn upfront and trail under its own terms. Your client’s interests decide the recommendation.
Repricing or Refinancing: What Each Does to Trail
Repricing changes the price of an existing loan. Refinancing repays the old loan and establishes another. An internal product switch sits between these simple descriptions, so establish how the lender records it before assuming its commission treatment.
| Question | Repricing the Existing Loan | Refinancing to Another Lender |
|---|---|---|
| What changes for the client? | The existing lender agrees to a different rate or discount | A new lender provides a replacement loan |
| What happens to existing trail? | Usually continues on the retained loan | Stops when the old loan is repaid |
| Is there new upfront? | A rate change alone usually earns no new upfront | Payable if the new loan meets commission terms |
| Can old upfront be clawed back? | Usually no discharge to trigger it | Possible within the old lender’s applicable period |
| What decides the choice? | The retained loan’s overall suitability and cost | The replacement loan’s benefit after switching costs |
The Australian Securities and Investments Commission (ASIC) explains the best interests duty in RG 273: Mortgage brokers: Best interests duty. When providing credit assistance, you must prioritise the consumer’s interests over your own if they conflict. Preserving trail or receiving new upfront cannot justify a worse client outcome.
How to Request a Rate Review From the Current Lender
A home loan rate review starts with the client’s existing loan details and a comparable alternative. Ask for a discretionary discount through the lender’s broker pricing tool or retention channel, where available. If the route is unclear, ask your business development manager (BDM) which team handles existing-customer pricing.
Prepare the request before lodging it.
- Confirm the client’s authority for you to discuss the loan and obtain their current balance and rate.
- Record the loan-to-value ratio (LVR), using a property value the lender accepts. Include the repayment history and any changes that affect pricing eligibility.
- Supply a competing offer for a comparable loan. Match the loan purpose and repayment type, then account for features and fees.
- State the discount or rate you seek and ask when an accepted change takes effect. Keep the response with the client’s review record.
ANZ Qualify’s pricing instructions describe an automated approval or counter-offer after the broker completes the required fields. For an existing ANZ loan, the broker forwards the approval email and customer account details to HomeLoanInterestDiscounts@anz.com. The pricing outcome and application of the discount are separate steps.
Westpac’s broker site directs brokers to BrokerHub to request pricing. Use its existing-customer workflow or your BDM’s direction for a retention request. An automated pricing decision can arrive during the online request. A manual retention referral needs the team’s quoted turnaround, so set the client’s expectation from that response before promising a completion time.
Retention pricing is a discount the lender agrees to keep the client’s business. Record whether the lender approves an ongoing discount or a time-limited offer. At the next review, compare the client’s actual rate again and request a further discount if the comparison supports it. A previous approval does not guarantee the next one.
Can You Negotiate a Fixed Rate Mortgage?
You can discuss the rate that will apply after a fixed term ends. The rate within an existing fixed term is normally set by the contract. Moving out of that arrangement early can incur break costs, even when the client stays with the lender.
Moneysmart explains fixed-rate restrictions and reversion. Unless the borrower makes another arrangement, the loan usually moves to the lender’s variable revert rate at expiry.
Before expiry, ask the lender for its proposed variable discount or another fixed-term offer. Compare both with suitable alternatives and confirm when any agreed rate starts. If the client wants to change during the fixed term, obtain a break-cost quote before calculating savings. For a split loan, assess the variable portion separately from the fixed portion.
What Repricing Does to Trail and Clawback
A rate reduction on the same continuing loan usually leaves the trail arrangement running because the borrower has not repaid and discharged that loan. It does not create a fresh upfront entitlement merely because the interest rate changes.
A product switch or a new loan number requires a closer check. A new account identifier alone does not establish whether the lender treats the transaction as a variation or a replacement loan. Ask the lender or aggregator to confirm whether the switch counts as a discharge for commission purposes. Obtain the applicable treatment of existing trail and upfront before recording the expected result.
Connective’s published member agreement defines clawback by the supplier’s early-payout or other contractual conditions. Use the lender’s terms that apply to the loan, together with your aggregator agreement. A retained customer relationship alone does not settle the question.
What Refinancing Does to Trail and Clawback
When a refinance pays out the old loan, the old lender’s trail ends. The new loan can generate upfront and ongoing trail under the new lender’s commission schedule. If the old loan remains inside its applicable clawback period, repayment can also trigger a clawback. There is no single clawback period to apply across every loan.
Use the published commission terms for the old loan to identify the trigger and repayment percentage. Then calculate the amount recoverable from the upfront originally paid. Calculate the new upfront from the new lender’s eligible balance and rate, allowing for your aggregator split and consistent GST treatment.
For a hypothetical cash-flow comparison, suppose your applicable terms produce a $2,000 old-loan clawback and $3,000 new upfront. The immediate commission difference is $1,000 before other business costs. Those are illustrative results, not lender rates. Also record when each payment or deduction occurs. A positive difference does not make the refinance suitable for the client.
Keep this calculation separate from the client’s switching-cost assessment. Use the clawback rules guide for the detailed commission review and the refinance timing guide when assessing the next step.
When a Refinance Suits the Client Better
A refinance can serve the client better when the current lender’s final offer leaves a worthwhile saving elsewhere. It can also solve a need that repricing cannot address.
- The lender declines the repricing request or its discount leaves the loan materially more expensive.
- A lower rate elsewhere produces enough savings to recover switching costs within the client’s expected holding period.
- Another product has a feature the client needs, such as an offset account that suits their savings.
- The client needs a restructure that the existing lender cannot provide on suitable terms.
Compare each option over the same remaining term. Include discharge and establishment costs, plus any break costs or lenders mortgage insurance (LMI). LMI protects the lender and can increase the cost of switching. Moneysmart’s switching guide explains why the client must recover those costs before a lower rate creates savings.
For example, a hypothetical $600,000 balance with a 0.30 percentage-point rate reduction saves about $1,800 in annual interest before balance changes. If switching costs total $1,500, the simple recovery period is about ten months. Recalculate using the client’s repayments and offset balance before presenting a recommendation. Record the reasons for the choice, including any feature benefit that supports a higher-cost option.
Find the Clients Due for a Rate Review
Build a review queue before a client asks another broker for a quote. In Track My Trail, Refinance Finder lists active loans settled more than two years ago, ordered by settlement age and balance. It includes an estimated LVR and a settlement-month filter for recurring reviews. Marking a loan reviewed returns it to the queue after 90 days.
With the client’s open banking consent, Refinance Finder shows their current rate and rate type alongside their balance and offset. It also shows the gap to current lender rates. Lender Rates supplies published product rates from 121 lenders, with filters for loan purpose, repayment type and LVR. These published rates give you a comparison point for a repricing request. They are distinct from a client’s negotiated offer.
Set a recurring review cycle, confirm the client’s needs and request retention pricing before recommending a move. Record the agreed rate and next review in your post-settlement retention process. Use lifetime value per client to understand the book’s longer-term income, while keeping each loan recommendation grounded in the client’s benefit.
