Why now could be the best time to refinance your home loan

Collage of a woman helping another woman onto a better home loan interest rate by refinancing.

The last year has been wild – between Reserve Bank rate hikes, plummeting property prices, and cost of living pressures, many borrowers have copped it at all angles. Not to mention we’re rapidly approaching the fixed-rate mortgage cliff – yikes. 

But if you’ve been despairing over your home loan, take heart. All this market movement is a handy reminder to make sure you’re getting the best interest rate from your lender. So let’s consider why now could be a great time to refinance.

Should I refinance my home loan now? Pros and cons

Collage of a woman thinking about a piggy bank, AKA her finances.

Refinancing is still a big decision that requires a bit of preparation, so it’s important to start gauging ahead of time whether it could be a good option for you. Doing this gives you a chance to sort your finances and evaluate where you stand with your equity.

After all, you’ll need to qualify for whichever new home loan you apply for, and if it’s been a hot minute since you took out your initial mortgage, times have certainly changed. No one wants to discover they’ve unintentionally become a home loan hostage!

However, if you’ve asked yourself these five important refinancing questions and think it could be the go, there are plenty of benefits. Some of the advantages of refinancing include:

  • Switching to a lower interest rate.
  • Making smaller monthly repayments.
  • Improving your credit score long-term.
  • Receiving cashback upon approval. 
  • Changing to a lender you like better. 
  • Reducing loan fees. 
  • Accessing your equity, which can be used to purchase another property.
  • Shortening your loan term.

Because interest rates have been shooting sky-high lately, there’s a lot of competition among smaller lenders hoping to catch customers jumping ship from the Big Four banks. Competition means lower interest rates and more attractive loan features like offset accounts, which is great news for you. With a little research and loan comparison, you can get an idea of what offers are available to you. 

RELATED: How do ANZ, CBA, NAB and Westpac compare?

However, there are a few important caveats to keep in mind when refinancing your mortgage. Namely:

  • Your credit score may dip short term. This is because anytime you refinance, even if it’s with the same lender, it’s logged as a ‘hard enquiry’ on your credit report. Make multiple of these hard enquiries, and you can look like a dodgy customer, which can hurt your score and ironically make it harder to refinance. 
  • You’ll need to know how much your property is worth. RBA rate hikes have been a major factor in smothering property value growth across the country. If prices have tanked in your area, you may have lost equity, which hurts your chances of refinancing. Get a professional property valuation done so you know what you’re sitting on. 
  • Your lifestyle may have changed and impacted your loan eligibility. Have you had a kid recently? Changed careers? Taken out new credit cards and accumulated some debt? You’re not the same borrower you were when you first started your loan, so you’ll need to get across how your circumstances have changed and how that impacts your loan prospects. 

If you’re unsure where to start, Mozo’s experts do the hard yards for you by comparing the best home loans on the market.  Check out the top options below to start your refinancing journey.

Compare refinance home loans - last updated 29 May 2024

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  • Discount Variable Home Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

  • Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

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

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • 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.


* 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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