Julie's situation is like many parents who find themselves close to paying off the family home. She is also planning to cut back on her full-time job, but her utility bills are preventing her from taking a pay cut.

"Don't be scared about refinancing, it's not as bad as it sounds," I told Julia, while helping Sarah lug her mattress into the hire truck. "Because once you find a smaller place and choose which home loan you want to switch to — or combine or spread your debt into one, or several, accounts — you will be much better off."

So after helping Julie understand the downsizing process and working out the sums, she decided to take the plunge. Julie hopes to move closer to her kids and be near better transport, so after selling her house she will need to borrow about $100,000 for her next home.

The most important step is to compare home-loan deals on the market. This could mean the difference between retiring in 10 years or working full-time for the next 20 years.

For example, the average variable interest rate for a $100,000 home loan is 5.83 percent p.a., which means monthly repayments for a 25-year term would be about $634.

However, while comparing online, I found Julie several home loans that offered comparison rates as low as 5.03 percent. That means Julie could save herself $48 a month or more than $14,000 over the life of the loan.

So make sure you shop around when it comes to refinancing, and make a list of your needs and wants for home-loan features before you start your hunt.

Tips to think about when comparing home-loan features:

• Always compare the comparison rate as this is the average annual percentage rate over the term of the loan and usually includes upfront, ongoing and discharge fees.
• Does the loan offer the option to add extra repayments and does this incur a fee?
• Is there an offset feature? This means that an account is set up and linked to your home loan, whereby you can deposit extra repayments to reduce the interest and access this money if needed.
• Does the loan offer a split option? This is where you have the choice to keep part of the loan with a variable rate and part with a fixed rate.
• How much does it cost to break the contract if you want to pay off the loan sooner?
• Is the mortgage portable? If you are planning to upsize, downsize or perhaps move locations, you may be able to substitute the home in the loan for another down the track. By using the same documentation you may save on stamp duty.

Your say: Have you downsized your house? How did you go about it?