Thinking about refinancing your home loan? Here are your options
Whether you’re paying a higher interest rate than you’d like or your current home loan doesn’t offer the features you need, it would be a mistake to stick with it. Unfortunately, many Australians are unaware of their options and wind up doing just that. If you feel your home loan isn’t up to scratch, here are a few things you can do.
Switch to another loan from the same lender
One option is to stick with your lender but switch to another offering of theirs. To start, browse the products listed on their website to find ones with lower interest rates, greater flexibility, or access to more features. If you spot one you like it could be worth giving your lender a call to see what they can do.
Negotiate a lower rate
Another option is to simply ask your lender for a lower rate. It’s generally a good idea to review your interest rate every so often anyway to make sure you’re getting the best deal. While this may seem daunting, you’d be surprised how straightforward the process can be.
The first step is to familiarise yourself with the rates offered by competitors (here’s where our home loan comparison page can help). When comparing options, make sure to narrow your search to loans similar to yours. For example, if you’re with Westpac, see what the other big banks are offering. And if you have an investor loan, don’t compare it to ones for owner occupiers.
It also pays to know what your lender is currently offering to new customers. Chances are it’s a better rate than you’re paying — after all, new customers have to be enticed, while banks are betting that some combination of loyalty and complacency will keep longtime customers from leaving.
Once you’ve done that, the next step is to call up your lender and let them know you’re dissatisfied with your current rate. Often banks will throw out a small discount hoping it will be enough to keep you on board. But if it falls short of what you’re after, don’t give up. Present the findings from your research and ask if they are willing to match them.
To really show you mean business, ask your lender for a discharge form. If you’re not already speaking to a member of the customer retention team, you’ll be on the phone with them soon enough, at which point you should reiterate your intention to leave unless you get the discount you’re after.
How can you improve your chances?
Depending on your financial position and the type of loan you have, you might be better placed to secure a discount than others. Below are a few things that lenders look for when deciding whether to grant borrowers a lower interest rate.
- If you are an owner occupier, rather than an investor
- If you are paying principal and interest, rather than interest only
- If you have a good credit history and haven’t missed any repayments
- If you are working full-time
- If you own 20% or more of the property
Refinance to another lender
If your attempts to negotiate a better rate with your current lender have been less than fruitful, it might be time to part ways. While refinancing to a cheaper lender might involve some extra fees and forms, it can be worth it if you’re able to save on interest in the long run.
RELATED: What are the costs of refinancing your home loan?
At the same time, it pays to be aware of the downsides. For one, there’s a chance refinancing will impact your credit score. This is because each time you take out a new line of credit, a provider will conduct what’s known as a hard pull credit inquiry, which then appears on your overall credit history.
A single hard inquiry isn’t anything to be concerned about, but if too many are made over a short period of time you risk jeopardising your credit rating. To get around this problem, make sure you research all your available options upfront and only apply to a small number of lenders once you’re confident they’re right for you.
What about fees?
While the overall goal of refinancing is to save money, it’s not unusual for a few fees to pop up along the way. These can include:
- Discharge fee. Your old bank or lender may charge you a fee to terminate your existing home loan early.
- Break fee. If you’re refinancing from a fixed interest rate home loan, your old lender will most likely charge you a break fee.
- Application fee. Since refinancing involves signing up for a new home loan, you may be sprung with an application fee.
- Valuation fee. Your new lender may want an up-to-date valuation of your property, which you’ll have to pay for.
- Settlement/legal fee. Once everything is settled, you may have to pay a settlement or legal fee.
If you want to compare what’s on the market, visit our home loan comparison page, where you’ll be able to filter your search by rate and type. And to get an idea of how much you could be saving, compare your lender’s interest rate with a competitor’s using our switch and save calculator.
Home loan comparisons on Mozo - last updated 29 March 2024
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Offset Home Loan
Package, Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.15% p.a. variable6.40% p.a.Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.
CompareCompareOffset Home Loan
Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.40% p.a.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.40% p.a.
- Upfront fees
- $350
- Ongoing fees
- $248.00 yearly
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- 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 Offset Home Loan
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Mozo experts choice awards won:
- Exceptional Value Home Lender - 2024
Express Home Loan
Owner Occupier, Principal & Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment6.01% p.a. variable6.14% 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.
CompareCompareExpress Home Loan
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.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- Upfront fees
- $134
- Ongoing fees
- $10.00 monthly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $5,000
- maximum borrowing amount
- $3,000,000
- 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 Bendigo Bank Express Home Loan
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Mozo experts choice awards won:
- Fixed Rate Home Loan - 2024
- Investor Fixed Home Loan - 2024
Fixed Rate Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment5.99% p.a.
fixed 2 years6.24% p.a.Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
CompareCompareFixed Rate Home Loan
Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
- interest rate
- 6.29% p.a.
fixed 3 years
- comparison rate
- 6.30% p.a.
- interest rate
- 6.29% p.a.
fixed 3 years
- comparison rate
- 6.30% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $395.00
- Extra repayments
- yes, up to $25,000 during fixed period - fee applies
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $20,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the BCU Bank Fixed Rate Home Loan
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Featured Product
Ultra Low Rate <95% LVR
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.30% p.a. variable6.58% p.a.Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required. New Purchase - Metro only.
CompareCompareUltra Low Rate <95% LVR
Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required. New Purchase - Metro only.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- Upfront fees
- $790
- Ongoing fees
- $0.00
- Discharge Fee
- $795.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $350,000
- maximum borrowing amount
- $2,000,000
- 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 Sucasa Ultra Low Rate <95% LVR
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.For refinancers only. 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 in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. 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 in as little as 10 minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Upfront fees
- $0
- 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
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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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