How much could you pocket by refinancing your mortgage in 2022?

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Last year was a big one for Australians switching their home loans.

The latest lending indicators provided by the Australian Bureau of Statistics show that mortgage holders refinanced $306 billion worth of home loans in the first ten months of 2021 (November and December figures are yet to be reported).

To put that figure into perspective, borrowers refinanced $244 billion in home loans during the whole of 2020 - previously the highest yearly total on record.

According to Mozo Banking Expert, Peter Marshall, the array of very low home loan rates on offer from lenders during the past few years have likely enticed many borrowers to refinance their home loans.

“People have likely seen plenty of advertisements from banks and lenders offering interest rates which are much lower than the existing rate they’re getting,” he said.

“Add that to having a bit of extra time during the lockdowns of 2021, and that might have proved enough for some mortgage holders to put the effort in to actually swap to a better rate.” 

The good news for prospective refinancers is that home loan rates are still relatively low - particularly variable rates. In fact, variable rates are at their lowest point in years.

Not only is the average variable rate for owner occupiers in the Mozo database (3.06%) the lowest recorded since 2015, 12 different lenders being tracked in our database have at least one home loan with a headline variable rate below 2.00%.

Lower rate, more savings

First of all, not all mortgage holders will be in a position to refinance. For example, many lenders require borrowers to have a loan-to-value ratio (LVR) of 80% or below before they can refinance.

It’s also important to take into account any fees associated with refinancing, including discharge fees on an existing loan or application fees with a new one. Borrowers with a fixed rate will also need to weigh up any break cost fees against the benefit of a lower rate.

If you are in a position to refinance the savings can be substantial though. Although the exact amount you can save will depend on your existing interest rate, the rate you swap to, your loan size and the loan length among a number of other factors.

Here’s an example using a $500,000 loan size being paid off with principal and interest repayments over 20 years.

Monthly repaymentMonthly differenceAnnual difference
2.00%$2,549
2.50%$2,653+$104+$1,248
3.00%$2,759+$210+$2,520
3.50%$2,868+$319+$3,828
4.00%$2,980+$431+$5,172

As the table shows, the interest rate you’re paying can make a significant difference to your repayments and, as a result, even if you were able to switch to a rate just 50 basis points lower than your current one you could stand to save over $1,000 a year in repayments.

That’s just one example though, so if you’re interested in finding out how much you could stand to save, crunch your numbers using our Home Loans Switch and Save Calculator.

RELATED: Multiple lenders are offering $3,000 cashback to refinance your home loan

Ready to see what kind of refinancing offers are out there? Get started straight away by checking out some of the deals listed below, or search through even more options by using Mozo’s dedicated refinance home loan comparison table.

Refinance home loan comparison - last updated 25 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

* 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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