Why now could be the perfect time to refinance your mortgage

Polly Fleeting

17 Mar 2020

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If current Australian and world events have left you wondering about the state of your finances, you’re likely not alone. 

Whether you have been affected by the recent bushfires or are feeling the blow of the latest outbreak of COVID-19 (Coronavirus), you may be left thinking you need to hold onto your cash even tighter than you did before. 

So while making small changes like saving on grocery shops or cutting costs on your energy bill may all help in the long run, refinancing your mortgage could be an effective way to give yourself an instant pay rise. 

Since the Reserve Bank of Australia (RBA) cut the official cash rate by 25 basis points to an historic low of 0.50% earlier this month, home loan rates have become more competitive than ever. 

According to the Mozo database, a whopping 52 mortgage lenders passed on the full 0.25% rate cut, leaving the average variable rate sitting at 3.49% (compared to 4.34% this time last year). 

Plus, 82 out of 95 lenders in our database offer fixed or variable home loan rates below 3.00%, with the most competitive rate currently at a low 2.44%. 

How much could I save in monthly repayments by refinancing my mortgage? 

Let’s do the maths. 

Say you currently have a 30 year home loan of $400,000 at last year’s average of 4.34%, you’d currently be paying $1,989 in monthly repayments. 

However, if you were able to refinance that 30 year loan to another loan with a more competitive interest rate, like 2.49% (one of the lowest on our database), your monthly repayments would sit at $1,578 instead. 

That’s a $411 difference, every month! 

RELATED ARTICLE: Home loan variable rates now start with a '2'

So in a nutshell, if you took out a home loan last year or earlier, and your lender hasn’t passed on the recent RBA cuts, chances are you aren’t getting as good of a deal as you could be. 

Want to check some offers out? Take a look at the table below, or give our Switch & Save Calculator a try.

Refinance Mortgages 2020

Rates updated daily. Advertiser disclosure.

  • loans.com.au

    1.99% p.a.variable for 12 months and then 2.48% p.a.

    2.47% p.a.

    $1234

    Product details Close details
    Smart Booster Home Loan

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • $520

    • 1.99% p.a.variable for 12 months and then 2.48% p.a.

    • 2.47% 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

  • UBank
    Mozo Expert Choice Badge

    p.a.

    2.27% p.a.

    $1234

    Product details Close details
    UHomeLoan

    $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    • $0.00

    • $0.00

    • yes - free up to $20,000 p.a.

    • no

    • no

    • $395

    • p.a.

    • 2.27% p.a.

    • $395

    • 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 31 March 2020.

    Read our Mozo Review to learn more about the UHomeLoan

  • Athena
    Mozo Expert Choice Badge

    2.19% p.a.

    2.19% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 2.19% p.a.

    • 2.19% 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

  • Virgin Money

    p.a.

    2.73% p.a.

    $1234

    Product details Close details
    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.

    • 2.73% 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 with applications made by 22 Jan 2021 and settled by 23 April 2021.

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

  • Macquarie

    p.a.

    2.53% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.

    • $0.00

    • $400.00

    • yes - free

    • yes - free

    • no

    • $0

    • p.a.

    • 2.53% p.a.

    • $0

    • 80.00%

    • $150,000

    • $750,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Monthly

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

  • 86 400

    2.19% p.a.

    2.20% p.a.

    $1234

    Product details Close details
    Neat Home Loan

    Competitive variable rate. Borrowers choose their repayment schedule (weekly, fortnightly or monthly) and can also make extra repayments. Redraw facility available. Simple online application process.

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • no

    • $250

    • 2.19% p.a.

    • 2.20% p.a.

    • $250

    • 60.00%

    • $80,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

^See information about the Mozo Experts Choice Home loans Awards