How much could you pocket by refinancing your mortgage in 2023?

Collage of a woman refinancing her mortgage on her laptop.

Paying off a home loan ain’t what it used to be. Now that average variable interest rates have cleared the 6.00% mark in the Mozo database, many borrowers have scrambled to jump ship from mortgage repayments that have risen by hundreds of dollars a month. 

In fact, according to the Australian Bureau of Statistics (ABS), Australians refinanced $19.9 billion worth of home loans in February 2023 alone – $3 billion more than the same time last year. 

“Lenders will often make sharper rates available for new customers than they do for their existing customers,” explains Mozo banking expert Peter Marshall. 

“Now is a great time to check out some of those sharper rates and see if you can do better than what you’re on currently. And you might even be able to pick up one of the great cashback deals that are available, too.”

But because interest rates have flown sky-high, comparing offers has become more vital than ever. While the average variable rate is well above 6%, the best rates tracked by Mozo still lean in the 4 - 5% range. So how much more money could you pocket if you refinance your mortgage

Let’s dive in.

Lower interest rate, more savings

Collage of a woman walking up ascending LVR tiers on a mortgage.

It’s important to remember that because interest rates have risen so much, not everyone will be in a position to refinance. Rate hikes affect property prices, too, so many homeowners will have lost equity in the last year, which means they may not qualify for the minimum 80% loan-to-value ratio many lenders require to refinance. 

Your lifestyle and spending habits may have also changed due to the rising cost of living, which means you will have to take stock of how you spend your money before filing the application. Spending more, and saving less? You could look extra risky to a lender. 

There may also be fees associated with refinancing, such as discharge or application fees. These extra costs can add up more if you break a fixed home loan early

That being said, if your financial ducks are in a row and you know why you should refinance, it can make a great option to dodge expensive monthly repayments

For example, if you refinanced a $500,000 principal & interest loan with 20 years left on your term, here’s a breakdown of how much you could theoretically save.

Monthly repaymentMonthly differenceAnnual difference
8.00%
$4,182
7.00%$3,876$306
$3,672
6.00%$3,582$294$3,528
5.00%$3,300$282$3,384
4.89%$3,269$31$372

At the time of writing, 4.89% p.a. is the lowest variable interest rate in the Mozo database. 

As the table shows, your interest rate can make a significant difference in how much you pay for your home loan overall. Even dropping 1% could save you thousands a year. 

To see how much you could pocket by refinancing, try our switch and save calculator

Compare refinancing home loans below.

Compare refinance home loans - last updated 28 February 2024

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

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.11% p.a.

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

    Compare
    Details
  • Straight Up

    Obliterate, Owner Occupier, Principal & Interest, <50% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.24% p.a.

    Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.

    Compare
    Details
  • Flex Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    6.64% p.a.
    fixed 3 years
    6.52% p.a.

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

    Compare
    Details
  • Straight Up

    Obliterate, Investor, Principal & Interest, <50% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.34% p.a. variable
    6.34% p.a.

    Investors get a low variable rate depending on your deposit with Athena’s Straight Up Investor Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.

    Compare
    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. 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.

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