Make the most of the RBA rate cut by refinancing your home loan

Niko Iliakis

11 Jun 2019

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It’s been a week since the RBA decided to cut official interest rates, but we’ve already seen more than 20 lenders pass on the full 0.25% cut to their variable home loan customers. 

With so many lenders making cuts, and several now offering rates well below the 3.50% mark, you might be looking at your home loan and wondering how to best take advantage of the situation.

If your lender passed the rate cut on to you, one way to make the most of it, says Mozo’s banking expert, Peter Marshall, is to keep up with pre-cut level repayments.

“By continuing to make the same repayments as before the rate cut you may not be paying much above the minimum repayment level each month, but over the life of the loan it can really add up,” he said.

“For example, paying an extra $50 per month on a loan of $500,000 with an interest rate of 3.50% would save around $8,600 in interest payments over the life of the loan."

If, however, your bank has decided to hold onto some of the RBA rate cut for itself, or only offered new low rates to new borrowers, refinancing your home loan might be in order. Thankfully, there’s no shortage of attractive options on the market right now. Below we’ve compiled some seriously hot rates everyone with a mortgage should have on their radar.

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Homestar Star Essentials Home Loan Refinance Special
  • Variable rates from 3.24% p.a. (3.25% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • No application fees or ongoing fees

The Homestar Star Essentials Home Loan delivers some of the best value on the market. Along with an incredible 3.24% p.a. variable rate (3.25% p.a. comparison rate*) available on loans of less than $750,000, it offers plenty of flexibility. You’ll be able to pay off your loan weekly, fortnightly or monthly, and extra repayments come at no additional cost. And if at any point you decide those funds could be better served back in your pocket, you can always get them back with the free redraw facility.

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UBank UHomeLoan - Discount Offer
  • 3.59% variable interest rate for loans over $200,000 (3.59% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • No annual fees

A Mozo Experts Choice Award winner in the Low Cost and Split Home Loan categories, the UBank UHome Loan offers value at every turn. Owner occupiers borrowing between $200,000 and $699,000 will be looking at a variable rate of 3.59% p.a. (3.59% p.a. comparison rate) thanks to the special discount offer. And with free extra repayments and a free redraw facility, there’s lots of flexibility on the table.

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Well Home Loans Well Balanced
  • 2019 Mozo Experts Choice Award winner for Best New Home Loan

  • 3.49% interest rate (3.53% comparison rate*)

  • Free extra repayments and redraw facility

The Well Balanced home loan was a favourite in this year’s Mozo Experts Choice Awards, picking up awards in the Low Cost, Offset, Split, and Investor Home Loan categories. But the accolades don’t stop there -- we also saw fit to name it the Best New Home Loan of 2019. Owner occupiers are treated to a low 3.47% p.a. variable rate (3.48% p.a. comparison rate*), plus a number of nifty features like free extra repayments, free redraw facility, and an offset account that’s available for $10 per month.

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Athena Variable Home Loan
  • Rates from 3.34% p.a. (3.30% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • No application fees or ongoing fees

After the RBA’s announcement, Athena was one of the first lenders to pass on the full rate cut to its customers, making good on its motto, “Love us and leave us”. The Athena Variable Home Loan, which sports a low 3.34% p.a. interest rate (3.30% p.a. comparison rate*), now ranks among the best value home loans in our database. What’s more, there are no application fees, and if you make all your repayments on time during the first five years, you’ll be rewarded with a 0.01% discount each year.

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Suncorp Fixed Home Loan Special Offer
  • 3.49% 3 year fixed rate (4.25% comparison rate*)

  • Free extra repayments up to $500 each month

  • Annual package fee waived in the first year

Want to lock in a rate while they’re at rock bottom? The Suncorp Fixed Home Loan offers rates of 3.49% p.a. (4.25% p.a. comparison rate*), and was recognised in the 2019 Mozo Experts Choice Awards in the Fixed Home loan category. You’ll be able to make repayments either weekly, fortnightly, or monthly, and extra repayments are free up to $500 per month. While there’s a yearly service fee of $375, this is waived for the first year for new customers.

*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 the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. 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.

The above are just some of the options available for refinancers, so if you're eager to see more, be sure to check out our refinance home loans comparison page.

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