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

    Macquarie

    2.54% p.a.

    2.81% p.a.

    $1234

    Product details Close details
    Offset Home Loan Package

    Handy offset account to help pay your home loan off sooner. Up to 10 offset accounts per loan account available. Fee free access at ATMs. Waived credit card annual fee. $0 international purchase fees.

    • $248.00 yearly

    • $400.00

    • yes - free

    • yes - free

    • yes

    • $0

    • 2.54% p.a.

    • 2.81% p.a.

    • $0

    • 70.00%

    • $150,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Monthly

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

  • Promoted

    loans.com.au

    2.48% p.a.

    2.50% p.a.

    $1234

    Product details Close details
    Smart Home Loan 80

    A low-rate home loan that could save you thousands, with no ongoing fees plus unlimited extra repayments and free redraws. Mozo Experts Choice Low Cost Home Loan 2020.^ You'll need to be borrowing $1 million or less and have at least a 20% deposit required.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • $520

    • 2.48% p.a.

    • 2.50% 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 80

  • Promoted

    HSBC

    p.a.

    2.95% p.a.

    $1234

    Product details Close details
    Fixed Rate Home Loan

    Have the security of a fixed rate for 2 years with the option to split with one of the HSBC variable Home Loans. No ongoing monthly service fees or annual fees. Mozo Experts Choice Fixed Home Loan 2020^

    • $0.00

    • $300.00

    • yes - free up to $10,000 p.a.

    • no

    • no

    • $0

    • p.a.

    • 2.95% p.a.

    • $0

    • 80.00%

    • $50,000

    • $7,500,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Fixed Rate Home Loan

  • Promoted

    Athena

    2.34% p.a.

    2.34% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 2.34% p.a.

    • 2.34% p.a.

    • $0

    • 60.00%

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Celebrate Variable Home Loan

  • Promoted

    Homestar

    2.29% p.a.

    2.32% p.a.

    $1234

    Product details Close details
    Star Essentials Home Loan

    Low Cost Home Loan 2020 winner.^ A home loan packed with all the essentials and offering up to $1500 cashback and no ongoing fees. No Construction loans.

    • $0.00

    • $535.00

    • yes - free

    • yes - free

    • no

    • $515

    • 2.29% p.a.

    • 2.32% p.a.

    • $515

    • 80.00%

    • $150,000

    • $850,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • Refinances receive up to $1,500 cashback or upfront fees waived on purchases for applications received by 31 October 2020 and settled by 31 January 2021.

    Read our Mozo Review to learn more about the Star Essentials 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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