Could you save $125,386 by refinancing your home loan?

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It’s no secret, Australian home owners have been switching their mortgages in droves.  

The latest figures from the Australian Bureau of Statistics show that $26.9 billion worth of home loans were refinanced in the month of June, made up of $17.4 billion from owner occupiers and $9.5 billion from investors. 

If those numbers seem big, you’re right. The $26.9 billion figure (which is not seasonally adjusted) represents the largest volume of switching recorded in at least two years.   

What’s behind this switching surge? Well, one reason, highlighted by a recent Mozo analysis, is the potential windfall refinancing can provide borrowers who are able to switch to a cheaper home loan with a lower interest rate. 

“Something as simple as comparing interest rates and refinancing when you find a more competitive deal can really pay off,” says Mozo spokesperson, Tom Godfrey. 

“If you’re with a Big Four bank you might be able to push them to sharpen your rate but the biggest savings are found beyond the top end of town.” 

And anyone looking for evidence of the price premium paid by borrowers for their loyalty need to look no further than the latest Lenders' Interest Rates from the Reserve Bank. 

According to the RBA, existing variable rate home loan customers (3.08% average) are currently paying 29 basis points more on average compared to new customers (2.79% average). 

“While it’s encouraging to see a jump in loan refinancing, complacency can be a costly business when it comes to your home loan,” says Godfrey.  

How much could refinancing save you? 

So we know that complacency can cost, but how much can mortgage holders actually save? Depending on your current rate, potentially a lot. 

A Mozo analysis found that a borrower with a home loan of $400,000 would stand to save $125,386 over a 30-year term if they were able to switch from the current average Big Four variable rate (3.53%) to the lowest variable rate in the Mozo database of 1.88% (1.97% comparison rate*) with the Reduce Home Loans Super Saver loan.^^ 

That may be the lowest variable rate presently available, but here’s how the current average Big Four variable rate stacks up against a range of lower rates based on the same scenario as outlined above.

Variable rateTotal interest paid (30 years)
2.00%$132,252
2.25%$150,434
2.50%$168,974
2.75%$187,867
3.00%$207,100
3.53%$249,038

Of course, while the interest rate on offer will be a large consideration for potential refinancers, potential costs such as discharge fees on an existing loan or upfront fees with a new loan may also be important to take into account. 

RELATED: Low rates abound for refinancers with lower LVRs

Want to crunch your own numbers to see how much interest you could potentially save on your mortgage? Get started with our Switch and Save Calculator

Otherwise if you’re ready to start comparing offers with a view to refinancing check out some of the hot rates in the table below, or head on over to our refinance home loan hub to compare more deals from an even larger selection of lenders. 

^^This scenario is based on an owner occupier borrower with an 80% loan-to-value ratio (LVR) making principal and interest repayments on their home loan.

Hot refinance home loan deals - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.variable for 24 months and then 2.25% p.a. variable
    2.21% p.a.

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

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    Details
  • placeholder
    Mozo Experts Choice 2021
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.
    fixed 3 years
    2.24% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    1.99% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    Go to site
    Details
  • placeholder
    Variable Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    1.99% p.a.

    Refinance only. Super-fast digital application process. Zero upfront fees. No on-going service fees. Free 100% offset sub account. Apply Online & Refinance before 29 October 2021 for the chance to WIN your home loan interest free - Save up to $1.1 million. T&Cs apply.

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    Details
  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.32% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Variable Home Loan Special

    Owner Occupier, Principal & Interest, LVR <70%

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    2.02% p.a.

    Special rate applies to home loan applications submitted by 31 October 2021. Unlimited additional repayments, free redraw, 100% offset account. 30% deposit required. Simple online application. Low Cost Home Loan winner in the Mozo Expert's Choice Awards for 2021.

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    Details
  • placeholder
    Special Fixed Rate Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    3.67% p.a.

    Lock in a low fixed rate or choose to split your loan between fixed and variable. Insurance discounts and no fee credit card or zero fee personal loan available. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent. Limited time offer extended, T&Cs apply.

    Go to site
    Details
  • Hot DealGet a decision on your application fast
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    Prime Home Loan

    Owner Occupier, Principal & Interest, LVR <70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.44% p.a. variable
    2.49% p.a.

    Competitive low variable rates for borrowers with 30% deposit. Flexible home loan with no ongoing fees. Extra repayments and redraw available. Get a dedicated specialist for the loan application process.

    Go to site
    Details

* 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 $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. 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.

^See information about the Mozo Experts Choice Home Loan Awards

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