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 - last updated 24 January 2022

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

    Details
  • Mozo Expert Choice Badge
    UHomeLoan - Discount Offer
    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    1.99% p.a.

    Enjoy a super low rate. $0 fees to consider. Fast and easy online application. Free redraw and free extra repayments. Flexible payment terms. Min 20% deposit required.

    Details
  • Variable Home Loan
    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    1.99% p.a.

    Same low variable rate for all. No upfront or ongoing fees. Approval in minutes not weeks with a fast digital application. 100% offset sub account with no account or redraw fees. Comes with a Visa debit card, mobile App, and digital wallet (Apple and Google Pay). Refinance only. 25% deposit or equity required.

    Details
  • Mozo Expert Choice Badge
    Celebrate Variable Home Loan
    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a. variable
    1.89% 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.

    Details
  • Basic Home Loan
    interest rate
    comparison rate
    Initial monthly repayment
    2.14% p.a. variable
    2.14% p.a.

    Competitive low variable rate. No application or account management fees. Flexibility to split your loan and set different repayment types. Fee free withdrawals of your savings.

    Details
  • Discounted Home Value Loan
    interest rate
    comparison rate
    Initial monthly repayment
    1.97% p.a. variable
    1.98% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Plus, $3,288 cashback offer (conditions apply).

    Details
  • Special Real Deal Home Loan
    interest rate
    comparison rate
    Initial monthly repayment
    2.22% p.a. variable
    2.26% p.a.

    No application or service fees. Flexibility to choose your repayment schedule ( weekly, fortnightly or monthly) . $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent.

    Details
  • Mozo Expert Choice Badge
    Variable Home Loan Special
    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    2.02% p.a.

    Yard’s low-rate variable special home loan is packed with all features – unlimited additional repayments, free redraw, 100% offset account. Enjoy a simple online application. Special rate applies to home loan applications submitted by 31st January 2022. Low Cost Home Loan winner in the Mozo's Experts Choice award 2021.

    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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