Refinancing When Property Prices Have Stalled

After a run of interest rate rises and a noticeably cooler property market in 2026, a lot of homeowners have quietly shelved the idea of refinancing. The logic seems sound enough: if your property hasn’t gone up in value, surely there’s less room to move, less equity to work with, and less reason for a lender to offer you anything better. It’s an understandable assumption. It’s also, in most cases, wrong.

We’re hearing this concern more often as major bank economists revise their 2026 price forecasts down to flat or modest growth across most capital cities. But a stalled market doesn’t mean a stalled opportunity. Let’s consider what’s actually happening with property values, how refinancing decisions really work when prices are flat, and why now can still be exactly the right time to review your loan.

Property price growth has slowed markedly in 2026, weighed down by a series of cash rate rises and changes to investment property tax settings announced in this year’s Federal Budget. Several major bank economists now expect prices to be broadly flat across the year, with some capital cities recording monthly falls.

Despite this, refinancing remains a live and worthwhile option for most homeowners. Lenders assess your loan based on your current equity position, not on how much your property has grown since purchase, and for many borrowers, years of repayments mean there is still meaningful equity to work with even without price growth. A flat market can also make lenders more competitive for your business, not less, as they work harder to win and retain customers in a slower environment.

Below, we unpack what’s driving the current slowdown, how equity and valuations actually factor into a refinance, and what to do if your situation feels less straightforward than it once did.

Why Have Property Prices Stalled in 2026?

The current slowdown has two main causes. The first is interest rates. The Reserve Bank of Australia lifted the cash rate three times earlier in 2026, taking it to 4.35 per cent, before holding steady at its most recent meeting. Higher rates reduce how much buyers can borrow and increase the cost of holding a mortgage, which naturally cools demand and price growth.

The second is policy. This year’s Federal Budget introduced changes to negative gearing and capital gains tax settings for property investors, and the shift has visibly softened buyer sentiment in the months since, alongside falling auction clearance rates and properties taking longer to sell. Supply remains tight in many areas, which is helping to prevent sharper price falls, but the overall pace of growth has clearly slowed compared to recent years.

Does Refinancing Depend on Rising Property Values?

Not in the way most people assume. Refinancing is primarily about your loan-to-value ratio (LVR), which compares your outstanding loan balance to your property’s current value. That ratio can improve over time even if your property’s value stays flat, simply because you’ve been paying down the loan itself.

A borrower who purchased three years ago with a 10 per cent deposit, for example, may now have an LVR closer to 75 or 80 per cent purely through regular repayments, regardless of what’s happened to the market. That improvement alone can be enough to unlock a better rate, remove the need for lenders mortgage insurance, or open the door to a lender you couldn’t previously qualify with.

How much equity you have access to also depends on how long you’ve owned your property. If you purchased in the past few years, your valuation is likely to come back close to your original purchase price, since there’s been little time for growth on top of what you’ve paid off. If you’ve owned your property for five to ten years or more, however, you’ve generally benefited from a longer run of price growth before this year’s slowdown, which often means considerably more equity to work with, on top of the equity you’ve built through your regular repayments.

How Lenders Actually Assess Your Equity

When you apply to refinance, your lender will order a valuation of your property. In a flat or softening market, that valuation may come in close to your original purchase price rather than significantly above it. This is normal, and it doesn’t necessarily rule out a successful refinance.

What matters most is the relationship between that valuation and your remaining loan balance. Even a conservative valuation can support a competitive refinance if your balance has come down enough. This is why we always run the numbers properly before ruling anything in or out, rather than assuming a slower market automatically closes off your options.

What If Your Valuation Comes Back Lower Than Expected?

If a valuation comes back lower than you’d hoped, it isn’t necessarily the end of the conversation. Depending on your LVR, there may still be competitive options available, simply with a different lender or loan product than the one you had in mind. In some cases, it may make more sense to negotiate directly with your current lender for a better rate rather than switch entirely, particularly if switching costs would outweigh the benefit.

The key is finding this out before you rule refinancing out altogether. A conversation costs nothing, and it’s the only way to know where you genuinely stand.

Why Now Might Still Be the Right Time to Refinance

A slower property market often coincides with lenders competing harder for borrowers, not less. When fewer new buyers are entering the market, banks and non-bank lenders alike tend to sharpen their offers to attract refinancers, including cashback deals, discounted rates, and more flexible serviceability assessments.

This is exactly where working with a mortgage broker makes a real difference. Most banks reserve their sharpest rates for new customers they’re trying to win over, and it’s rarely the case that they’ll volunteer a better deal to someone already on their books. We work across all of Australia’s lenders, not just one, which means we can compare what’s on offer and put your interests first rather than any single bank’s. The team at PierPoint Lending will fight to get you the best outcome available, not just the outcome that happens to suit the lender.

With the cash rate still elevated and the Reserve Bank’s next decision expected in August, many borrowers are also looking for ways to build in some buffer against further rate movements, whether that’s through a more competitive rate, a split loan structure, or better access to an offset account. Waiting for the market to move before acting on any of this isn’t necessary, and for many borrowers, it simply means paying more for longer than they need to.

Take the Next Step

If you’ve been holding off on refinancing because the market feels uncertain, it’s worth having an actual conversation before ruling it out. We can run the numbers on your current equity position, check what lenders are offering right now, and let you know honestly whether refinancing makes sense for you. Reach out to us today to find out where you stand.

Frequently Asked Questions

Can I refinance if my property hasn’t increased in value?

Yes, in most cases. Refinancing depends on your loan-to-value ratio, which improves as you pay down your loan balance, not only through property price growth. Many borrowers can still refinance successfully even in a flat or softening market.

Will my property be revalued if I refinance?

Yes. Your new lender will typically order an independent valuation as part of the refinance process. In a slower market, this valuation may sit close to your original purchase price rather than well above it, which is normal and doesn’t automatically prevent a successful refinance.

Is it a bad idea to refinance during a period of market uncertainty?

Not at all. Periods of uncertainty are often when refinancing has the most value, whether that’s locking in a more competitive rate, building a buffer against further rate rises, or accessing loan features better suited to your current situation. The property market’s direction and your loan’s competitiveness are two separate questions.

What happens if my valuation comes back lower than I expected?

A lower than expected valuation doesn’t necessarily rule out refinancing. Depending on your loan-to-value ratio, you may still have competitive options, or it may make more sense to negotiate with your current lender instead. The best way to know is to have your situation properly assessed rather than assume the worst.

How do I know if now is the right time for me to refinance?

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