Refinancing as a Veterinarian: When It's Worth It and When It Isn't

Your income and the market have likely both changed since you took out your loan. Here is how to know if a switch makes sense.

If your home loan has been sitting untouched for a few years, there is a reasonable chance it is no longer working as hard for you as it could be. Refinancing is not always the right move, but for vets specifically, there are a few situations where it is worth a serious look, and a couple of traps worth knowing about before you do.

Why Vets Are Often Good Refinance Candidates

Vet incomes tend to grow meaningfully over the first five to ten years of a career, and that income growth often is not reflected in the loan someone took out earlier on. A vet who bought their first property as a new graduate, possibly without a profession-based LMI waiver or accurate treatment of overtime and locum income, may now be in a position where a different lender would assess them very differently today.

Common situations where refinancing genuinely helps:

• Your income structure has changed since you took out the loan, for example moving from salaried to locum work, or adding clinic distributions

• You paid LMI on your original purchase and were not aware of vet-specific waivers at the time

• Your current lender's interest rate is no longer competitive compared to the broader market

• Your HECS debt has reduced or been repaid, freeing up serviceability that was not there originally

• You want to consolidate other debts or access equity for a specific purpose, such as a deposit for an investment property

  
  

The LMI Trap When Refinancing

One thing to check carefully before refinancing: if your new loan amount, combined with your current property value, puts you above an 80% Loan to Value Ratio, you may trigger LMI again on the new loan, even if you did not pay it originally. This is where a profession-based vet waiver becomes relevant again. If the new lender offers one and you qualify, this cost can be avoided. If you refinance to a lender that does not offer a Vet waiver, you could end up paying LMI on a refinance that should have saved you money, not cost you more.

When Refinancing Is Not Worth It

Refinancing is not free. There are costs to weigh up, including potential discharge fees from your current lender, application fees on the new loan, and in some cases LMI if your situation has changed unfavourably (a smaller deposit relative to a higher property value, for example). If your current rate is still competitive and your income situation has not changed meaningfully, it is worth running the numbers properly before assuming a switch is automatically worthwhile.

A rate difference of even 0.3% to 0.5% on a loan in the high six figures can add up to meaningful savings over several years, but the right comparison needs to account for fees, LMI exposure, and how your income is currently assessed, not just the headline rate.

What a Refinance Review Should Actually Look At

• Your current rate against what is currently available across the market for your profile

• Whether your current lender properly recognises your overtime, locum, or distribution income today

• Whether you would qualify for a vet-specific LMI waiver that you may have missed originally

• The total cost of switching, including discharge and establishment fees, weighed against the savings

• Whether your loan structure still suits your goals, for example if you are now considering an investment property

Our Approach to Refinance Reviews

We regularly review existing vet clients' loans, not just new applications, because circumstances and lender policies both shift over time. Having gone through our own refinancing decisions as practice owners, we understand that a refinance is worth doing properly or not at all. We will tell you honestly if it is not worth the switch, not just push you towards one because it is an easy conversation to have.

Wondering if refinancing makes sense for you?

Book a free discovery call. We will review your current loan and tell you honestly whether a switch is worthwhile.

solidfoundations.com.au