Home loan review: Is it time to refinance?

By Cameron Thomson · · 2 min read
Fact Checked
Advertiser disclosure

Borrowers have been feeling the squeeze since RBA began its rate hike spree and many have been trying to find strategies to keep themselves afloat—and refinancing might just be one of the favourites amongst Aussies.

This is all according to newly released Australian Bureau of Statistics (ABS) data that found refinancing was at an all-time high in the most recent years with it rising from $2.9 Billion in March of 2005 to $14.1 Billion in March of 2023.

So the question is, should you be refinancing your home loan now?

What is home loan refinancing?

When you refinance your home loan, you’re essentially paying off your old mortgage with the new one. In general, refinancing is used to switch your loan over to a better deal which may involve reducing the length or duration of the loan.

You’ll also find that refinanced home loans can come with particular perks such as cashback offers, low or no ongoing fees, and discounted interest rates. 

Why you might consider refinancing your home loan

With the RBA likely keeping interest rate hikes on the table in the future, many borrowers may want to consider refinancing as they could be at the edge of what they could realistically handle in terms of interest rate hikes. 

Alternatively, even if you’re in a good financial position, you might just find yourself with a home loan provider that isn’t giving you a particularly advantageous loan. This could be that the interest rate you currently have is higher than the standard or you may find yourself inundated with a load of fees and know you could get a better deal on one or both.

How refinancing your home loan could help

So, let’s say that you’ve taken out a loan where your deposit is only worth 5% of the total value of the property. Because of this, you had to pay Lenders Mortgage Insurance (LMI) which is usually paid for borrowers whose deposit is worth less than 20% than the total value of the property or a loan-to-value ratio (LVR) of more than 80%.

Now, let’s say you had only paid off 15% of the total property value. If you were to refinance at this stage, your LVR would be at 85% meaning that you would need to pay LMI again with your new loan provider. On the other hand, if you’d paid off enough of your loan so that you owned 20% or more of the property's value, then there’d be no LMI on your refinanced loan. What’s more, the lower the LVR on your refinanced loan, the lower the interest rate would likely be.

It’s for this reason, those who’ve paid off quite a lot of their loan can find themselves in a much better position by refinancing. So, if you find yourself worried about being able to make repayments in the future, it could be a good idea to consider refinancing.

Not sure which home loan provider to refinance with? At Mozo, we have comparisons on loads of refinancing providers so that you can get the home loan that works for you.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 24 November 2024 Important disclosures and comparison rate warning*

Refinance home loan comparisons on Mozo

Promoted

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    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 online in minutes.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.28 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Get the security of a competitive fixed rate home loan for 2 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    5.74 % p.a.
    Fixed 3 years
    Comparison rate
    6.81 % p.a.
    Initial monthly repayment
    $2,915

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    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 online in minutes.

  • Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.18 % p.a.
    Variable
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $3,056

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

Showing 6 of 430 home loans. Use the filters to see more
image of houses

Need help with your Home Loan?

Whether you're looking to purchase a new home or refinance your existing loan, our friends at Lendi can help! Lendi’s expert advice is completely free of charge. Book an appointment and enter the draw to win $30K.

Learn more

* 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. 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.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Compare home loans