Home loan refinancing levels surged to $24 billion in May

couple-refinancing-home-loan-in-kitchen

The value of home loans refinanced by Australian mortgage holders has reached its highest level in years according to new figures from the Australian Bureau of Statistics (ABS).

Released last Friday as part of the Bureau's monthly lending indicators, the data shows that, in total, $24 billion worth of home loans were refinanced during May which, as the graph below shows, is the largest amount in more than two years. 

The bulk of the switching ($15.9 billion) was done by owner occupiers who, as a group, refinanced $2.3 billion more than they did in April, with an average loan size of $454,121.

Investors also proved motivated to refinance their loans in May, switching $8.19 billion worth of loans which was a month-on-month increase of $1.4 billion.

What’s behind all this refinancing? There are a number of possible motivators for mortgage holders, though one of the major factors is likely to be low home loan rates.

While 4 and 5-year fixed rate terms have started to tick up in recent months as lenders have adjusted their rate outlooks, shorter term fixed rates and variable rates are at some of the lowest levels they’ve been in years. 

In fact, the average variable rates^^ in the Mozo database for both owner occupiers and investors have recently dropped to the lowest points they’ve been since we started tracking them in January 2015. Currently they’re sitting at:

  • 3.22%: For owner occupiers making principal and interest repayments
  • 3.63%: For investors making principal and interest repayments

And those are just the averages! There are now over 50 lenders in our database with at least one variable rate home loan on offer to owner occupiers with a headline rate below 2.50%.

So for borrowers who haven’t refinanced their loan to a lower rate in recent years, what kind of savings could be on offer? Here’s an example.

Let’s say homeowners Ava and Marc want to refinance their $400,000 loan (OO, <80% LVR), on which they’re making principal and interest repayments. Their current lender is charging them a variable rate of 3.22%, so they’re looking to make the switch to a new lender offering a rate of 2.50%.

According to our home loan repayments calculator the couple would not only be able to reduce their monthly repayments by $143, they’d save $34,341 in total interest over a 20-year period.

RELATED: $3,000 cashback: ING unveils new incentive for home loan refinancers

Past time that you checked in to see how your own home loan rate measures up? Start comparing rates today with our handy refinance home loans comparison table, or check out some of the great offers available to refinances from the lenders below.

^^Average variable home loan rates come from loans tracked in the Mozo database and are based on a $400,000 loan amount and 80% loan-to-value ratio. For more averages and figures, check out our home loan statistics page.

Compare refinance home loans - last updated 9 August 2022

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

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

    interest rate
    comparison rate
    Initial monthly repayment
    3.60% p.a.variable for 24 months and then 4.00% p.a. variable
    3.96% p.a.

    Already includes July RBA rate increase. 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
  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.14% p.a. variable
    3.06% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

    Details
  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

    Details
  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% 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.

    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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