All big 4 banks hike home loan rates - is now a good time to refinance?

Monika Gudova

12 Nov 2018

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With last man standing NAB succumbing to funding pressures and announcing a home loan rate rise for new customers, Aussie mortgage holders are wondering one thing: can I save by switching home loans?

Since June, we’ve seen variable home loan rate rises across the board, affecting not only big four customers, but those with second-tier lenders, too.

Westpac, ANZ and Commbank customers, were hit with variable rate hikes of between 14 and 16 basis points.

“The reason cited for these hikes, according to the banks, is an increase in funding cost pressures, which then have a ripple effect on interest rates,” said Mozo Data Manager Peter Marshall.

Last week, NAB joined the troup, hiking its Base Variable Rate Home Loan rate by 18 basis points, but only for new customers.

“Whilst a rate hike is never good news for consumers, NAB’s actions shouldn’t be compared to the rest of the big four, who applied rate hikes across all of their variable home loan products.”

And it’s not just the big four that have made rate hikes, 14 second-tier lenders have increased their variable rates since Westpac made their announcement.

“Whilst it’s looking unlikely there will be any further rate rises in the near future, especially after another month of the RBA keeping the official cash rate steady, you should be evaluating the damage already done - specifically how it affects your mortgage repayments,” said Marshall.

“There’s no reason you should be paying more for your mortgage, so if you’ve been affected by
the recent rate rises, now could be a great time to make the switch.”

How much can I save by refinancing

If you’ve seen your home loan rate go up in the last few months and need to know what that means for your wallet, we’ve got you covered. We’ve taken our home loan repayments calculator for a spin to help you understand these changes, and see how much you can save by switching home loans.

If you were borrowing $400,000 and paying principal and interest over 30 years on the current average loan rate in Mozo’s database of 4.37%, your monthly repayments would have come to $1,994.

But, if your lender hiked your rate by 15 basis points, you’d pay an extra $37 a month or $444 a year.

However, if you were to refinance your home loan for the lowest rate in our database, Reduce Home Loans Rate Lovers Variable rate of 3.44%, you’d only pay $1,783, saving you $2,976 that year.

If your home loan rate just went up and you’re thinking of refinancing, check out some of the great offers below, or head over to our home loan comparison tool to find a deal that works for you.

Refinance home loans - rates updated daily

  • Promoted

    loans.com.au

    2.88% p.a.

    2.90% p.a.

    $1234

    Product details Close details
    Smart Home Loan

    A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount, Limited time only.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 2.88% p.a.

    • 2.90% p.a.

    • $520

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Home Loan

  • Promoted

    UBank

    2.84% p.a.

    2.84% p.a.

    $1234

    Product details Close details
    UHomeLoan - Discount Offer

    Free redraw with flexible repayments. Min 20% deposit. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category^.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 2.84% p.a.

    • 2.84% p.a.

    • $0

    • 80.00%

    • $200,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the UHomeLoan - Discount Offer

  • Promoted

    ANZ

    3.24% p.a.

    3.28% p.a.

    $1234

    Product details Close details
    Simplicity PLUS Special Offer LVR <80%

    Low rate. No ongoing fees. Can make extra repayments & redraw. Min. 20% deposit. Apply by 31/01/20 and settle by 30/04/20 for $2,500 cashback on eligible refinanced loans of $250K+ (incl. any new lending). Offer terms, fees, charges and elig. criteria apply.

    • $0.00

    • $160.00

    • yes - free

    • yes

    • no

    • 3.24% p.a.

    • 3.28% p.a.

    • $0

    • 80.00%

    • $50,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • Refinance by 31 January 2020 to receive up to $3,500 cash back depending on the loan amount with an ANZ linked transaction account.

    Read our Mozo Review to learn more about the Simplicity PLUS Special Offer LVR <80%

  • Promoted

    Suncorp

    3.03% p.a.

    3.04% p.a.

    $1234

    Product details Close details
    Back to Basics Special

    No monthly account keeping fee, no ongoing annual fee and no loan establishment fee on new lending of $150,000 or more. Only 10% deposit required.

    • $0.00

    • $350.00

    • Yes - free

    • first redraw per month free

    • no

    • 3.03% p.a.

    • 3.04% p.a.

    • $0

    • 90.00%

    • $150,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Back to Basics Special

  • Promoted

    Reduce Home Loans

    2.77% p.a.

    2.78% p.a.

    $1234

    Product details Close details
    Rate Buster High Lend Variable Home Loan

    Low variable rate. Extra repayments may be made at any time without penalty. 100% offset account available at $10/month. Loan Splits available.

    • $0.00

    • $0.00

    • yes - free

    • yes

    • yes - optional $10/month

    • 2.77% p.a.

    • 2.78% p.a.

    • $0

    • 80.00%

    • $200,000

    • $3,500,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Rate Buster High Lend Variable Home Loan

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

Mozo’s top refinancing tips

If one thing’s for sure, it’s that there’s savings to be had from shopping around for a lower home loan rate. So if you’re looking to refinance, keeps these tips in mind so you can reap the rewards:

● Do your research. A low rate isn’t the be-all-end-all when looking for a new loan. Keep in mind that handy features like an offset account and free extra repayment facility could serve you well in the long run.
● Weigh up the pros and cons. Refinancing isn’t free, and comes with costs such as discharge fees and upfront charges, so figure out whether the savings from refinancing your loan outweigh these costs.
● Consider a fixed rate. If you’re sick and tired of your lender constantly changing your rate, consider a fixed rate that can’t change for a number of years. Just remember that if market rates do eventually go down, your fixed rate won’t benefit from any rate cuts.
● Use a refinance calculator. One of the easiest ways to see what you could gain by refinancing your home loan is by putting your information through our switch and save calculator. Enter in your current loan and property details and press ‘get results’ to find a
list of loans that could save you big bucks.

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