Top refinancing tips, and the traps to avoid at all costs

Refinancing your home loan could save you tens of thousands of dollars over the life of the loan, and with interest rates on the rise it’s little wonder so many Aussie mortgage holders are looking to switch and save right now.

But before you jump headlong into refinancing, it makes sense to brush up your skills with some expert tips on getting a great refinance deal.

According to Mozo money expert Kirsty Lamont, it's important to consider smaller lenders as well as the banks when hunting down low home loan rates and fees, and to check whether you're eligible for interest rate discounts if you've built up decent equity in your property.

It’s also vital to understand what common refinancing traps you should avoid at all costs. According to Lamont, one of the biggest mistakes refinancers can make is getting blinded by cashback or honeymoon offers and switching to a mediocre home loan that doesn't reap long term savings.

So, if you're keen to switch and save, read on for the detailed Mozo expert guide to the top tips and traps of refinancing and use our low-rate home loan comparison table below to see how much you could save by switching.

TOP REFINANCE HOME LOANS - last updated 11 August 2022

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  • Variable Home Loan 70

    interest rate
    comparison rate
    Initial monthly repayment
    3.10% p.a. variable
    3.12% 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 30% deposit required.

    Details
  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.14% p.a. variable
    3.06% 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.

    Details
  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

    Details
  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% 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.

    Details
  • Smart Booster Home Loan

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

    interest rate
    comparison rate
    Initial monthly repayment
    3.60% p.a.variable for 24 months and then 4.00% p.a. variable
    3.96% p.a.

    Already includes July RBA rate increase. 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.

    Details
  • PAYG Investor Loan

    Investment, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.64% p.a. variable
    3.68% p.a.

    Low variable rate. Ideal for investors buying or refinancing. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

    Details
  • Smart Booster Home Loan

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

    interest rate
    comparison rate
    Initial monthly repayment
    3.74% p.a.variable for 12 months and then 4.23% p.a. variable
    4.22% p.a.

    Already includes July RBA rate increase. No monthly or ongoing fees. loans.com.au has some of the fastest settlement times on the market. They can meet 30-day settlement timeline so you can start saving thousands, as soon as possible! Mozo award-winning online lender, friendly and local Australian based team.

    Details

Mozo's Express Refinancing Guide

Top refinancing tips:

  1. Look beyond the big banks. Smaller and online lenders often offer some of the sharpest interest rates and lowest fees, not to mention fast online applications and efficient approvals.
  2. Understand your LVR. Many lenders now offer tiered rates depending on your loan to value ratio, so if you’ve built up decent equity in your property, you’ll likely be eligible for a sizeable rate discount.
  3. Rates aren’t everything. Consider what other loan features could help you pay down your mortgage faster, like an offset account to help save on interest, and compare fees to make sure they’re also competitive.

Avoid these refinancing traps:

  1. Chasing cashback and intro offers. Lenders love to woo refinancers with cashback deals, honeymoon rates and more, but if the home loan itself is not competitive you'll end up paying more in the long run.
  2. Extending your loan term. Your new lender might offer you a loan term of 25 or 30 years, but if you've already paid off part of your mortgage, extending it out again will cost you more in interest and see you taking even longer to get debt-free.
  3. Ignoring the comparison rate. Many borrowers skip over the comparison rate without realising that it's actually a very useful guide to the 'true' cost of the loan as it includes both fees and interest rates in its calculation.

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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, loan amount and term entered. 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.

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