New home loan approvals fall but refinancing is on the rise

Niko Iliakis

12 Jun 2020

Lending activity down content

The number of home loan approvals slipped 4.8% in April to $18.6 billion, according to recent data from the Australian Bureau of Statistics (ABS), the largest month-on-month decline since May 2015

Low confidence, fragile finances, and outright bans on auctions and open home inspections saw mortgage approvals fall by 5% to $13.7 billion for owner occupiers, and 4.2% to $4.8 billion for investors.

However, the ABS noted that the overall drop in lending activity was tempered by a backlog of applications from March, which took longer than usual to process due to disruptions caused by the coronavirus outbreak. 

Momentum has slowed for first home buyers too. Though they make up around a third of all owner occupied home loan commitments, mortgage approvals among the cohort pulled back by 3.8%. 

While the fall in new commitments was smaller than expected, lending activity is expected to remain depressed in the months ahead as the current economic crisis weighs on households’ finances and appetite for debt.

RELATED: Will young Australians be able to get a foot in the door?

But things haven’t been so downbeat for existing mortgage holders, who are taking advantage of record low interest rates to switch to better deals. Over the month, $7.9 billion of owner occupier home loans were refinanced, an increase of 50% from last year.

The current rate setting has fueled intense competition among lenders. Before the RBA cut official interest rates back in March, the average variable rate on a $400,000 loan (owner occupier, 80% LVR) sat at 3.68% p.a. By June that number had fallen to 3.43% p.a.

Fixed rates have seen an even sharper drop. In March, the average 2-year fixed home loan rate was 3.14% p.a. It now sits at 2.59% p.a. — a difference of 55 basis points.

If you’re paying too much on your mortgage and are looking to refinance to a cheaper loan, be sure to visit our home loan comparison page for an overview of what’s available, or browse the selection below.

Refinance home loans

Rates updated daily. Advertiser disclosure.

  • loans.com.au
    Mozo Expert Choice Badge" style="width:60px;">

    1.85% p.a.variable for 24 months and then 2.25% p.a.

    2.21% p.a.

    $1234

    Product details Close details
    Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    1.85% p.a.variable for 24 months and then 2.25% p.a.

    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.

    Smart Booster Home Loan

    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.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • $520

    • 1.85% p.a.variable for 24 months and then 2.25% p.a.

    • 2.21% p.a.

    • $520

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Booster Home Loan

    Details Close

  • UBank

    p.a.

    n/a

    $1234

    Product details Close details
    UHomeLoan

    Owner Occupier, Principal & Interest

    p.a.

    n/a

    Fast, easy to apply and no ongoing fees. Choose between weekly, fortnightly or monthly repayments. 1 year fixed rates are for new Owner Occupier Principal & Interest loans.

    UHomeLoan

    Fast, easy to apply and no ongoing fees. Choose between weekly, fortnightly or monthly repayments. 1 year fixed rates are for new Owner Occupier Principal & Interest loans.

    • $0.00

    • $0.00

    • yes - free up to $20,000 during fixed rate term

    • no

    • no

    • $0

    • p.a.

    • n/a

    • $0

    • 80.00%

    • $100,000

    • $2,000,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • $395 Establishment fee waived for fixed rate loans that settle by 30 September 2021.

    Read our Mozo Review to learn more about the UHomeLoan

    Details Close

  • Macquarie

    p.a.

    2.32% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    p.a.

    2.32% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    Basic Home Loan

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    • $0.00

    • $400.00

    • yes - free

    • yes - free

    • no

    • $0

    • p.a.

    • 2.32% p.a.

    • $0

    • 70.00%

    • $150,000

    • $750,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Monthly

    Read our Mozo Review to learn more about the Basic Home Loan

    Details Close

  • Athena
    Mozo Expert Choice Badge" style="width:60px;">

    1.99% p.a.

    1.99% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    1.99% p.a.

    1.99% 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.

    Celebrate Variable Home Loan

    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.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 1.99% p.a.

    • 1.99% p.a.

    • $0

    • 60.00%

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Celebrate Variable Home Loan

    Details Close

  • Virgin Money

    p.a.

    2.62% p.a.

    $1234

    Product details Close details
    Special Offer Reward Me Fixed Rate Home Loan

    Owner Occupier, LVR <80%, 300k+

    p.a.

    2.62% p.a.

    Enjoy $3,000 cashback when you refinance with Virgin Money (T&Cs apply). Additional repayments up to $10,000 per annum. Reverts to the discounted variable rate on expiry of the fixed term.

    Special Offer Reward Me Fixed Rate Home Loan

    Enjoy $3,000 cashback when you refinance with Virgin Money (T&Cs apply). Additional repayments up to $10,000 per annum. Reverts to the discounted variable rate on expiry of the fixed term.

    • $10.00 monthly

    • $350.00

    • yes - up to $10,000 per annum

    • no

    • no

    • $450

    • p.a.

    • 2.62% p.a.

    • $450

    • 80.00%

    • $300,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • $3,000 cashback for new borrowings of at least $300,000, applications by 29 August 2021, settled by 26 November 2021.

    Read our Mozo Review to learn more about the Special Offer Reward Me Fixed Rate Home Loan

    Details Close

^See information about the Mozo Experts Choice Home loans Awards