ASIC releases guideline updates to help ‘mortgage prisoners' refinance

By Ceyda Erem · · 2 min read
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A year on from Mozo’s analysis of the rising number of ‘mortgage prisoners’, the Australian Securities and Investments Commission (ASIC) has made guideline updates to the National Consumer Credit Protection Act 2019 about responsible lending to mortgage prisoners. 

Coined last year, the term ‘mortgage prisoners’ refers to homeowners who are unable to refinance their home loans because they would now fail to meet lending requirements required by banks. 

According to Mozo’s home loan expert, Steve Jovcevski, these are the homeowners that require the most financial assistance. 

RELATED: The number of Aussie ‘mortgage prisoners’ is set to rise, according to Mozo research

“The sad reality is borrowers who need competitive mortgage rates to stay financially afloat are most likely to be mortgage prisoners. When a customer is essentially tied to a provider, they are at the mercy of whatever rate rise or conditions the bank chooses to impose,” he said.

However, the new guideline update from ASIC will now provide transparency and assistance to lenders and brokers to their obligations when assessing customers looking to refinance their home loans. 

For instance, a borrower would be a suitable candidate for refinancing their loan if they’ve regularly made payments on time with their existing loan. 

A borrower would also be eligible should the new rate result in lower repayments as well as meet their product requirements. 

Although regular and on time repayments may be music to the ears of many lenders, ASIC has acknowledged that it could also “disguise circumstances of financial stress”. 

“Consumers will generally prioritise repayments for a principal asset such as a home over other outgoings and may take on additional credit to meet repayments (e.g. by using a credit card),” the Regulatory Guide states. 

RELATED: Australia’s best refinance home loans for 2019

To combat this, the regulatory body has recommended that lenders and brokers obtain a repayment history of at least 12 months and that they make themselves aware of any:

  • Signs of financial stress, such as credit card delinquencies or missing utility repayments 

  • Signs of financial stability, such as paying their credit balance in full 

Refinancing your home loan could make a massive difference to your monthly repayments and more importantly save you thousands over the life of your loan, so if you’re interested to find out if you could be getting a better deal on your home loan, check out our home loan comparison tool. 

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Last updated 5 December 2025 Important disclosures and comparison rate warning*
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    Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.19 % p.a.
    Variable
    Comparison rate
    5.10 % p.a.
    Initial monthly repayment
    $2,742
    Go to site
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  • Fixed Rate Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    Interest rate
    5.09 % p.a.
    Fixed 2 years
    Comparison rate
    5.43 % p.a.
    Initial monthly repayment
    $2,712
    Go to site
    • No ongoing annual fees
    • Make up to $25,000 extra repayments during a fixed period, fee free (T&Cs apply)
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  • Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.19 % p.a.
    Variable
    Comparison rate
    5.10 % p.a.
    Initial monthly repayment
    $2,742
    Go to site
    • The first home loan with an automatic loyalty discount (conditions apply)
    • No application or banking fees
    • Built by CommBank

  • Discount Great Rate Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    • Cashback
    Interest rate
    5.19 % p.a.
    Variable
    Comparison rate
    5.20 % p.a.
    Initial monthly repayment
    $2,742
    Go to site
    • Get up to $3,000 cashback when you apply online (T&Cs apply)
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  • Variable Home Loan 90

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
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    • Redraw available
    Interest rate
    5.29 % p.a.
    Variable
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    5.33 % p.a.
    Initial monthly repayment
    $2,773
    Go to site
    • No monthly or ongoing fees
    • Option to add an offset for 0.10% p.a.

  • Offset Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.39 % p.a.
    Variable
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    5.42 % p.a.
    Initial monthly repayment
    $2,805
    Go to site
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    • Pre-approval valid for 3 months
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** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. 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.

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