Like for Like Refinance in Australia (2026): The Lighter Serviceability Test, the 1 Per Cent Buffer Reported in 2023 and How to Refinance the Same Loan at a Lower Rate
No. Every refinance is assessed, so there is no such thing as a no assessment refinance. What exists is a lighter serviceability test: at some banks, a like for like refinance at a lower repayment can be tested more lightly than on the standard test. Everstone Finance, former bankers, places like for like refinances with Westpac, CBA and NAB. The bank decides each file.
- No refinance skips assessment: what can differ is the rate your repayments are tested at.
- The lighter test: where a figure was reported in 2023, the loan’s rate plus 1 percentage point, in place of 3.
- The standard test: APRA’s letter of 9 June 2023 says banks must test a home loan at a rate at least 3 percentage points above its interest rate.
- The exception: the same letter says a bank weighing an exception for a refinance can take past repayment behaviour into account.
- Where we place like for like refinances: Westpac, CBA and NAB. Current criteria are confirmed on your file before anything is lodged, and the decision is the bank’s.
Told you cannot refinance, with every repayment made on time? Ahmed, a former banker, checks which test your loan can be put to.
Tell him what you owe, the rate you pay and how long you have held the loan. You hear whether a like for like refinance suits your file, and which bank he would lodge it with.
Book a like for like refinance callIs there a no assessment refinance in Australia?
No. A no assessment refinance does not exist. A refinance is a new loan, and every new loan is assessed by the bank making it. Every refinance is assessed.
What does exist is a lighter serviceability test. The bank still assesses the file and makes the decision. What changes is the rate it tests your repayments at. On the standard test, the banking regulator’s guidance, kept in May 2026, puts that rate at least 3 percentage points above the loan’s own rate. On the lighter test, where the trade press reported a figure in 2023, the margin was 1 percentage point.
It suits one kind of borrower: someone who wants the same loan at a lower rate and already meets a higher repayment every month. That is a like for like refinance, also called dollar for dollar.
Ahmed Lotfi is a former banker, and Everstone Finance places like for like refinances with Westpac, CBA and NAB. APRA’s guidance treats a loan approved outside a bank’s standard criteria as an exception, and an exception is the bank’s to grant.
What is a like for like (dollar for dollar) refinance?
A like for like refinance replaces your home loan with the same loan at a lower rate. Dollar for dollar means the new loan is for what you owe today, or close to it. In our experience placing these loans, some banks allow an increase of up to $10,000. The property and the borrowers stay as they are.
The lighter test rests on a plain argument: you already meet a higher repayment than the one you are asking for. Three changes take a refinance out of like for like.
| Part of the loan | Like for like | No longer like for like |
|---|---|---|
| The amount | What you owe today, or up to $10,000 more at some banks. | A larger increase, or cash out for any purpose. |
| The repayments | Principal and interest. | Interest only. |
| Other debts | Left where they are. | Consolidated into the home loan. |
Borrowing more than that makes it a cash out refinance, the subject of our guide to cash out refinancing. Whether to stay or move is in our guide to refinancing with the same bank or switching.
Mortgage prison: why you cannot refinance because of serviceability
Mortgage prison is the phrase people use for a hard spot. You pay your home loan on time, a lower rate is on offer, and a bank says you do not qualify for it. Nothing is wrong with your record. The obstacle is how a new loan is tested.
APRA, the banking regulator, wrote on 9 June 2023 that banks must test a home loan at a rate at least 3 percentage points above the loan’s interest rate. This is the serviceability buffer, which APRA describes as a margin for rate rises and for changes in income or expenses.
So a refinance to a lower rate can fail on paper. The standard test adds 3 points to the new rate and sets that hypothetical repayment against your income and living costs. If your income has dipped or your costs have risen, the sum can fall short, even though the repayment you are asking for is smaller than the one you make now.
The lighter test is aimed at that gap. As reported in 2023 it used a lower test rate and leaned on evidence a first application cannot offer: a record of repayments made on time at a higher rate.
Getting out of mortgage prison starts with one question: can your refinance be put to the lighter test? To see roughly where you sit on the standard test, use our borrowing power calculator.
Can a bank refinance you below the 3 point buffer? What APRA allows
Yes, as an exception, and the regulator has said so in writing. APRA’s letter of 9 June 2023, titled “Housing lending standards: Reinforcing guidance on exceptions”, makes four points that matter here.
- Banks may approve loans outside their standard criteria in limited circumstances, as exceptions.
- For a borrower seeking to refinance, a bank considering an exception can take past repayment behaviour into account as a further indicator of the capacity to repay.
- Exceptions are to be used in a prudent and limited way.
- Banks must monitor exceptions against their own limits and report on them, and a large volume brings closer supervision.
The second point is the heart of a like for like refinance: your repayment record can count as evidence.
The letter says that, historically, exceptions to serviceability criteria were between 2 and 3 per cent of housing lending. In its update on macroprudential settings of 22 November 2024, APRA said that over the year before, banks had used exceptions to their serviceability criteria for about 5 per cent of new housing loans, up from 2 to 3 per cent. It attributed the rise partly to the high level of refinancing by existing borrowers. In its media release of 28 May 2026, APRA kept the buffer at 3 percentage points.
None of this obliges a bank to make an exception.
Streamlined refinance: which banks announced a lighter test in 2023?
The trade press reported Westpac, CBA and NAB each announcing a lighter test for refinancers between May and July 2023, and they are the three Everstone Finance places like for like refinances with. These are the conditions reported at announcement, and Everstone confirms the current ones with the bank before anything is lodged.
- Westpac (reported May 2023). The Adviser reported on 22 May 2023 that Westpac had introduced a “Streamlined Refinance” approach, applying a “modified Serviceability Assessment Rate” as a credit exception. Conditions reported: a new monthly repayment no higher than the current minimum contracted repayment; a minimum credit score for every applicant; principal and interest repayments only; no arrears or hardship in the previous twelve months; the loan being refinanced open at least twelve months with a good repayment record; and a cap on how far the new limit could exceed that loan. Exclusions reported: interest only, guarantors, debt consolidation and refinancing a portfolio of loans, among others. Australian Broker reported on 20 May 2023 that the measure covered Westpac and its brands St.George, Bank of Melbourne and BankSA; that the modified rate sat below the standard test, stayed above the bank’s floor rate and was applied as an exception; that borrowers had to be moving to lower monthly repayments with a twelve month record of paying existing debts; and that interest only terms, debt consolidation and loans needing lenders mortgage insurance were excluded.
- Commonwealth Bank (reported June 2023). Mortgage Professional Australia reported on 22 June 2023 that CBA had lowered the buffer for eligible refinancers from three per cent to one per cent, as an alternative assessment for borrowers who would not pass the standard test but otherwise qualify. Conditions reported: the loan open twelve months or more; a minimum level of equity; and no missed payments on any loan in the previous twelve months. Exclusions reported: properties bought under government affordability schemes and poor repayment histories.
- NAB (reported July 2023). The Adviser reported on 7 July 2023 that NAB would introduce a credit exception for like for like refinancers, for applications received from 21 July 2023, with the lower test decided case by case and no figure given. Conditions reported: a good credit history; a minimum level of equity; principal and interest repayments only; an amount no higher than the current balance; and bank-related fees up to a small share of the loan value could be covered. Mortgage Professional Australia reported on 8 July 2023 that NAB would ease serviceability requirements for eligible borrowers with a good repayment history, applying exceptions case by case. Everstone Finance confirms that NAB offers this alternate refinance assessment as at October 2026.
Each list dates from 2023 and no two match. Conditions change, so the list that counts is the one the bank is working to when your file reaches it.
The 1 per cent refinance buffer: what the reported conditions had in common
Everything in this section was reported in 2023; each bank’s current list may differ and is checked on your file. Four threads run through the reports by The Adviser, Mortgage Professional Australia and Australian Broker.
- A repayment that falls. Reported for two of the three banks: a new repayment no higher than the current one, or an amount no higher than the current balance.
- A good repayment record. Reported for two of the three: a loan at least twelve months old, with a good record over the previous twelve months. Reported for the third: a good repayment history.
- Principal and interest. Reported for all three: principal and interest repayments.
- Equity in the home. Reported for two of the three: a minimum level of equity. Reported for the third: loans needing lenders mortgage insurance left out.
So the borrower in those reports has held the loan a year or more, kept a good repayment record and has equity in the home. Where a file sits outside a bank’s current list, the refinance goes to the standard test, and we run it there.
A worked example: one loan tested at 3 points and at 1 point
The numbers below are our own, on a round loan amount, at illustrative rates that are not the rate of any lender. Take a home loan of $600,000 with 25 years to run on principal and interest. The rate today is an illustrative 6.90 per cent a year, and the like for like refinance is at an illustrative 6.30 per cent.
| Repayment on $600,000 over 25 years | Rate used | Each month |
|---|---|---|
| What you pay today | 6.90% | $4,202 |
| What you would pay after the refinance | 6.30% | $3,977 |
| Standard test: the new rate plus 3 points | 9.30% | $5,159 |
| Lighter test: the new rate plus 1 point | 7.30% | $4,356 |
The refinance takes $225 a month off the repayment, or $2,700 a year, before switching costs.
The standard test asks whether you could meet $5,159 a month. That is $957 more than the $4,202 you pay every month now, to qualify for a loan that costs you $3,977. The lighter test asks whether you could meet $4,356 a month, which is $154 above what you already pay. The gap between the two tests is $803 a month.
Neither tested figure is something you would pay. Each is a hurdle the bank sets against your income and living costs, under its own rules and on your own file.
The method: the monthly rate is one twelfth of the annual rate, and each figure in the table is the level principal and interest repayment that clears $600,000 over 300 months, rounded to the nearest dollar. Differences are taken between the rounded repayments, and the yearly saving is twelve times the monthly one. The 3 point buffer is the one APRA kept in its update of 28 May 2026, and the 1 point margin is the figure reported for one bank in 2023. All four rates are illustrative, not the rate of any lender, and a bank’s own test can use different inputs.
Same loan, lower rate: which test would yours face? See both tests worked on your own repayment.
Bring a recent loan statement. A former banker calculates your new repayment, sets the standard test beside the lighter one and confirms the bank’s current criteria before a single form is filled in.
Run both tests on my loanRefinance without a full assessment? What the bank still asks for
No. A lighter test is not a lighter file. Expect the bank to ask who you are, what you earn, what you owe and what the home is worth. None of it is needed for a first conversation.
- Your home loan statements. The repayment record is the centre of a like for like file.
- The loan itself. The balance, the rate, the years left and whether any part is fixed.
- Your income. Recent evidence of what you earn. The lighter test is still a test.
- Your other debts and living costs. They go into the bank’s sum.
- The property. A rough value to begin with.
Setting the file out the way a credit assessor reads it is the work of a former banker.
On timing, our guide on when to refinance a home loan covers the question.
What does a like for like refinance cost?
A like for like refinance to a new bank carries switching costs. They can include a discharge fee at the bank you leave, set up fees at the bank you join, a valuation, and the costs of settlement and registration.
If part of the loan is fixed, a break cost can apply when it is repaid early, as our guide to home loan break costs explains.
Set against that is the saving. We put both numbers in writing before you decide, what it costs to switch and what you save each month, so the months to break even are plain. Our guide to refinancing a home loan follows a switch from application to settlement.
How Everstone runs a like for like refinance, step by step
Most of the work happens before anything is lodged. This is the order we work in.
- The first conversation. By phone or video: your balance, rate, years left, repayment record and income.
- Both tests on your numbers. Your repayment at the new rate and the tested repayment on each test, in writing.
- The current criteria. We confirm what the bank’s lighter test asks for at that moment and check your file against it.
- The bank. Which of Westpac, CBA and NAB the file is taken to, and why.
- Application. The file is lodged with the repayment record at the front.
- Decision and settlement. The decision is the bank’s, and so is any exception. If the bank approves, the old loan is paid out and the lower repayment begins.
If you have been told you cannot refinance, bring that answer with you. Where it came from the standard test, the lighter test is the next thing to check. To start, book a time with Ahmed.
Frequently asked questions
Is there a no assessment refinance in Australia?
No. Every refinance is assessed, so a refinance with no assessment does not exist. What exists is a lighter serviceability test that some banks can apply to a like for like refinance at a lower repayment. The bank still decides.
What is a like for like refinance?
It replaces your home loan with the same loan at a lower rate, dollar for dollar, on principal and interest. A large increase in the loan, interest only repayments or consolidating other debts take it out of like for like.
Which banks announced a lighter test for like for like refinances?
Trade press reported in 2023 that Westpac, CBA and NAB each announced a lighter test for refinancers. A one per cent buffer in place of three was reported for CBA, and NAB was reported as deciding case by case. Everstone Finance, former bankers, places like for like refinances with these three banks, confirms NAB offers its alternate refinance assessment as at October 2026, and checks current criteria first.
Why can I not refinance when I have never missed a repayment?
Because a new loan is tested above the rate you would pay. APRA guidance, kept in its May 2026 update, has banks test a home loan at least 3 percentage points above its interest rate, so a lower rate can fail on paper. At some banks a like for like refinance can be put to a lighter test.
What is the serviceability buffer?
It is the margin a bank adds to a home loan interest rate when it tests whether you can afford the repayments. APRA describes it as a margin for rate rises and for changes in income or expenses, and kept it at 3 percentage points in its update of 28 May 2026.
Can I borrow more on a like for like refinance?
A little, at some banks. In our experience some banks allow an increase of up to $10,000 on a like for like refinance. Borrowing more than that makes it a cash out refinance, which Everstone Finance also arranges.
Sources
- Australian Prudential Regulation Authority, letter to all authorised deposit-taking institutions titled “Housing lending standards: Reinforcing guidance on exceptions”, 9 June 2023 (a home loan tested at a rate at least 3 percentage points above its interest rate, as a margin for rate rises and for changes in income or expenses; loans outside standard criteria approved in limited circumstances, as exceptions; past repayment behaviour as a further indicator of the capacity to repay for a borrower seeking to refinance; exceptions to be used in a prudent and limited way, monitored against a bank’s own limits and reported, with a large volume bringing closer supervision; exceptions to serviceability criteria historically between 2 and 3 per cent of housing lending): apra.gov.au, read 14 October 2026
- Australian Prudential Regulation Authority, “Update on APRA’s macroprudential settings”, 22 November 2024 (over the year before, exceptions to serviceability criteria used for about 5 per cent of new housing loans, up from 2 to 3 per cent, attributed partly to the high level of refinancing by existing borrowers): apra.gov.au, read 14 October 2026
- Australian Prudential Regulation Authority, media release of 28 May 2026 on its macroprudential settings (the mortgage serviceability buffer kept at 3 percentage points; the release says nothing about exceptions): apra.gov.au, read 14 October 2026
- The Adviser, 22 May 2023 (Westpac reported as introducing a “Streamlined Refinance” approach that applied a “modified Serviceability Assessment Rate” as a credit exception, with the conditions and exclusions reported at the time): theadviser.com.au, read 14 October 2026
- Australian Broker, 20 May 2023 (Westpac reported as applying a modified rate below the standard test, above the bank’s floor rate and as an exception, for borrowers moving to lower monthly repayments, across the group brands named in the text, with the exclusions reported at the time): brokernews.com.au, read 14 October 2026
- Mortgage Professional Australia, 22 June 2023 (CBA reported as lowering the buffer for eligible refinancers from three per cent to one per cent as an alternative assessment, with the conditions and exclusions reported at the time): mpamag.com, read 14 October 2026
- The Adviser, 7 July 2023 (NAB reported as set to introduce a credit exception for like for like refinancers for applications received from 21 July 2023, the lower test decided case by case, with the conditions reported at the time): theadviser.com.au, read 14 October 2026
- Mortgage Professional Australia, 8 July 2023 (NAB reported as set to ease serviceability requirements for eligible borrowers with a good repayment history, applying exceptions case by case): mpamag.com, read 14 October 2026
- Worked example: our own arithmetic on a home loan of $600,000 with 25 years, or 300 months, to run on principal and interest. The monthly rate is one twelfth of the annual rate, each repayment is the level repayment that clears the loan over 300 months, rounded to the nearest dollar, and each difference is taken between the rounded repayments. The rates of 6.90 per cent and 6.30 per cent are illustrative and are not the rate of any lender, and the tested rates add 3 points and 1 point to the 6.30 per cent. The example stops at the repayment and makes no claim about the income any bank asks for.
Bank names on this page identify the banks the cited reports describe and the three banks Everstone Finance places like for like refinances with. Each condition is given as it was reported on the date shown, not as a current rule, and no interest rate, fee amount, credit score, dollar cap or loan to value figure from any report is used. Two statements come from no report and are Everstone Finance’s own experience placing these loans as at October 2026: that one bank named in the text offers its alternate refinance assessment, and that some banks allow the loan increase stated in the text. Everstone Finance is not affiliated with, endorsed by or acting on behalf of any lender named here.