How much could you pocket by refinancing your mortgage in 2023?
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
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 repayment | Monthly difference | Annual 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 5 May 2024
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.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.
CompareCompareUnloan Variable
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.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
-
Basic Home Loan
Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.16% p.a.Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
CompareCompareBasic Home Loan
Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Macquarie Basic Home Loan
-
Flex Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment6.19% p.a. variable6.43% p.a.Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
CompareCompareFlex Home Loan
Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
- interest rate
- 6.19% p.a. variable
- comparison rate
- 6.43% p.a.
- Ongoing fees
- $250.00 yearly
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- -
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the ubank Flex Home Loan
-
Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Investment, LVR <80%
interest rate
comparison rate
Initial monthly repayment6.29% p.a. variable6.20% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- interest rate
- 6.29% p.a. variable
- comparison rate
- 6.20% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
-
Variable Home Loan 90
Principal and Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment6.04% p.a. variable6.06% p.a.Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.
CompareCompareVariable Home Loan 90
Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.
- interest rate
- 6.04% p.a. variable
- comparison rate
- 6.06% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the loans.com.au Variable Home Loan 90
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* 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
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