Refinancing boom: Record $17.2 billion worth of home loans switched in July

By Tom Watson · · 2 min read
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Australian homeowners have been switching their home loans like never before according to new figures released today by the Australian Bureau of Statistics (ABS).

The latest lending indicators from the ABS reveal that an ‘all-time high’ $17.2 billion (seasonally adjusted) worth of home loans were refinanced during July, which is a 6% month-on-month increase.

Refinancing from owner occupiers accounted for $11.37 billion of that total, while investors switched loans to a value of $5.86 billion. 

External refinancing values (seasonally adjusted). Source: ABS

abs-july-refinancing-data-2021

“The value of refinancing between lenders was 60 per cent higher in July 2021 compared to a year ago. This reflected borrowers seeking out lower interest rates, particularly for fixed rate loans, and cashback deals across a large number of major and non-major lenders,” said ABS head of finance and wealth, Katherine Keenan.

What’s behind the surge in switching?

As Keenan notes, one of the driving motivators behind this uptick in refinancing is the relatively low home loan rates currently available to borrowers. 

With the official cash rate sitting at a record low 0.10%, mortgage lenders have also moved to reduce their own variable and fixed interest rates in recent years. For instance, here’s a look at how the average variable and 2-year fixed rates in the Mozo database (for owner occupiers) have changed since September 2019.

Average rates in the Mozo database (September 2019-2021)^^

Variable rate2-year fixed rate
20193.92%3.37%
20203.36%2.51%
20213.14%2.22%

As the table above demonstrates, rates have dropped quite significantly, which has paved the way for many mortgage holders to refinance their existing home loans to more competitive deals with other lenders.

Keenan also points towards the large number of cashback deals as another potential driver for customer movement in the mortgage market. 

There are currently 23 lenders in the Mozo database with a home loan cashback offer, including the likes of Commonwealth Bank, BOQ, ING, Newcastle Permanent and Westpac - most of which are specifically for refinancers willing to switch loans. 

And they can be quite lucrative, currently ranging from $1,500 to $5,000. Although as Mozo spokesperson Tom Godfrey recently pointed out, refinancers will want to ensure they’re also getting a competitive rate with any cashback offer. 

“Lenders offer cashback incentives for various reasons and it’s not always to get you into their best value loan. That’s why it’s worth remembering that one of the best ways to improve your cash position is tapping into the best rate you can find and avoiding higher monthly repayments.”

RELATED: September home loan snapshot: Westpac headlines rate cuts, cashback deals grow

Ready to see if you can switch your own home loan to a lower rate? Get started right away by checking out the competitive deals in the table below, or head on over to our handy refinance home loan comparison table to compare offers from an even larger selection of lenders.

Refinance home loan comparison - last updated 24 April 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Featured Product
    Mozo Expert Choice Badge
    Unloan Variable

    Owner Occupier, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    5.90% 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.

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  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.01% p.a. variable
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

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  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% 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.

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  • Flex Home Loan

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

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a.
    fixed 3 years
    6.37% 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.

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  • Featured Product
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    Unloan Variable

    Investment, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.29% p.a. variable
    6.20% 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.

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  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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    Details

^^Average fixed and variable home loan rates are based on an owner occupier borrower who is making principal and interest repayments on a $400,000 loan amount with an 80% loan-to-value ratio. This only takes into account rates being tracked in the Mozo database. For more information, check out our dedicated home loan statistics page.

* 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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