Compare refinance home loans for May

Keen to see if you can switch & save on home loan repayments? Mozo has comparison tools, calculators, and expert tips to help refinance your mortgage. Compare refinance home loans below.

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Home loan comparisons on Mozo - last updated 21 May 2024

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You might have questions that need personal answers. We’ve teamed up with the mortgage brokers at Lendi to get you the answers you need, and a home loan deal you deserve.

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Interest rates change regularly - stay informed.

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Rachel Wastell

Financial expert

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May Refinancing Monthly Snapshot

With the prospect of a Reserve Bank of Australia (RBA) cash rate cut getting further and further away, borrowers holding out for rate relief might have to take matters into their own hands. 

While the average variable home loan rate in the Mozo database is 6.82% p.a. (OO, P&I, $400k, <80% LVR), the best rate we track comes in at over 1% lower. 

If you’re on an above-average rate, and you’re able to refinance your home loan, switching to a lower rate could do wonders for your finances. 

Mozo finance expert, Peter Marshall, says the best thing you can do is compare home loans to see what other lenders are offering and think about whether the rate reduction available is worth putting a bit of time into refinancing. 

“And if you don't want to do that, at least have a chat with your current lender and say, ‘Hey, I've seen a loan that's a bit lower than what you're offering. And I'm thinking about going to that lender.’ See if you can leverage a rate cut out of your existing lender that way.” 

Marshall also says it’s a good idea to check your loan-to-value ratio (LVR) from time to time. 

“If you've had your loan for a while and you've decreased your loan-to-value ratio, you may be able to get a better deal from a different lender by going through that refinancing process.” 

If you start off at 80% LVR or above, but you’ve paid off enough of your home loan to get it down to 60% LVR, lenders see you as a less risky applicant and may be happier to offer you a lower interest rate. 

“There are a couple of lenders that will do that automatically for you during the life of your loan, but most lenders don't,” he said. 

The Unloan Variable, for example, comes with an automatic annual discount of 0.01% p.a. up to a maximum discount of 0.30% p.a. for up to 30 years (T&Cs apply). 

Make the most of our refinance home loan comparison tool (above) and keep an eye out for features you might want like offset accounts or redraw facilities.

Or, learn more about getting a new loan by reading through our refinancing guides.

Refinancing Knowledge Hub

What is home loan refinancing?

Unhappy with your home loan or lender? Refinancing is the process of switching from one mortgage to another. 

Some great reasons to refinance your home loan include:

  • Lowering your interest rate. 
  • Reducing monthly repayments.
  • Changing loan terms.
  • Consolidating debt.
  • Switching home loan lenders. 

Ultimately, the purpose of refinancing is to save money, time, or stress – ideally, all three at once. Sometimes the grass truly is greener on the other side!

Woman refinancing her home loan

Ways to refinance your mortgage

There are several key ways to refinance your mortgage. Let's run through a few.

Interest rate and loan term refinancing

Interest rate and loan term refinancing

This type of refinancing switches your home loan interest rate and loan term

For example, you could refinance to a lower interest rate and extend your loan term to lower your mortgage repayments.

Conversely, you could refinance to shorten your loan term and save on overall interest.

Cash-out refinancing

If you’ve built up considerable home equity, it is possible to refinance your loan to get cash out.

Your home equity is the value of your homeownership, i.e. how much of your property you already own.

To get cash out, you refinance your home loan and borrow from the equity you've built up overtime.

This can increase your loan payments and extend your loan term.

However, it can also be a useful way to fund projects, like a second investment property or home renovations.

Cash-out refinancing
Debt consolidation refinancing

Debt consolidation refinancing

Debt consolidation loans combine multiple loans, such as credit card debt, personal loans, and mortgages into a single loan. 

It can be a useful way to tackle outstanding debt.

However, this can also spread debt over a longer period of time and increase your interest rate.

What are the benefits of switching home loans?

Some key benefits of switching home loans include lower monthly payments, shorter loan terms, and gaining access to better home loan features like offset accounts.

However, these advantages will depend on your new and old home loan. For refinancing to work, it’s vital to find a home loan deal that ticks all your boxes.

Expert Tip!

Smaller home loan lenders usually have sharper rates and more innovative savings features, including quick online refinancing.

Key considerations before refinancing

Before you refinance your home loan, ask yourself some basic refinancing questions, such as costs, dislikes, and wish lists. 

How much money could you save?

Refinancing doesn’t reduce your debt – your outstanding loan amount will remain the same when you switch.

However, comparing refinance home loans can help you see which mortgage ultimately costs you less.

For instance, switching interest rates, gaining interest-saving features, or changing your loan term could save you overall interest, even if you have some steeper payments upfront.

You can see how switching interest rates saves you money over time in the graph below. Try your own calculations using our home loan comparison calculator.

How much money could you save?
What fees do you have to pay for refinancing?

What fees do you have to pay for refinancing?

Refinancing home loans can come with some additional upfront fees. 

For example, you may have to pay charges and penalties for leaving your old home loan, such as fixed mortgage break costs and home loan settlement fees.

You may also have to pay fees for your new home loan, such as property valuation or application fees, though some lenders will cover or waive these.

How does refinancing affect your credit score?

Every time you apply for credit, it counts as a “hard inquiry” on your credit report. If you get rejected too many times trying to refinance, it could lower your credit score and make it harder to refinance your home loan.

Luckily, there are some strategies you can take to refinance with bad credit.

How does refinancing affect your credit score?

How to refinance your mortgage

Refinancing follows a similar process to taking out your initial home loan. The main difference is you already have the property.

Let’s look at how to refinance your mortgage, step-by-step.

Budget and save

Budget and save

Put your finances in order at least 3 months before you refinance. Check your spending and credit history.

Compare home loans

Compare home loans

Identify what you want in your new mortgage and compare offers with better features, rates, and fees.

Apply

Apply

Ready to switch? Get your refinance application to show your new lender why you’re a great bet.

What documents do you need to refinance?

Refinancing is like lodging your home loan application again. This means you’ll need identity documents, financial statements, and your property information. 

Here is the typical list of home loan documents you’ll need to refinance. Your new home loan lender might require additional supporting documents.

Identity documents

  • Primary identity documents, like your passport or driver’s licence.
  • Secondary identity documents, like your Medicare card.

Financial documents

  • Income statements.
  • Tax returns.
  • Bank statements, to show genuine savings.
  • Household spending statements.
  • Liabilities and debts, like car loans or credit cards.
  • Asset statements, like for share portfolios.
  • Credit history.

Property documents

  • Property details.
  • Property valuation report. 
  • Current home loan statement, to prove home equity.
  • Home insurance certificate. 
  • Council rates notice.
Happy refinancing couple

Why compare refinance home loans

Since home loans are a major cost, comparing refinancing options is a great way to save. 

Not only can you compare interest rates, terms, and fees from multiple lenders, but you can also see which home loans make your money count for more.

Refinancing calculators and tools

How much can you save by refinancing? It depends on the borrower and lender. Luckily, Mozo’s free, interactive home loan calculators make it easy to crunch your costs. 

Use these handy tools to calculate your borrowing power, estimate potential savings, and compare refinance home loans. Get started below!

Refinancing Home Loan Calculators

Compare home loan costs now! See more

Refinancing FAQs

Can I refinance with my current lender?

Yes, it is possible to refinance with your current lender. This is common when moving LVR tiers or switching to a different home loan product.

Do you have to refinance with a new lender?

No, you do not have to switch home loan lenders to refinance your home loan, but comparing lenders is an option to consider. 

For instance, if you’re dissatisfied with your current lender’s customer service, lack of features, or inflexibility with negotiating interest rates, you could refinance to a lender that’s a better fit.

How long does it take to refinance a home loan?

It depends on the refinancer. Sometimes it just takes a few days to refinance; sometimes, it takes a few months. 

You can speed up the refinancing process by preparing your finances ahead of time, assembling your documents, and researching lenders and home loans till you find the right one for you.

How does my credit score affect refinancing home loans?

Refinancing means qualifying for a new mortgage, so your new lender will look at your credit score and credit history to determine how safe you are as a borrower. 

While your credit score isn’t the end all be all, it’s still a vital part of your home loan application.

Can I refinance my mortgage more than once?

You can refinance your home loan as often as you like, but remember that every time you apply to refinance, it registers as a “hard inquiry” on your credit report. 

Lodging too many hard inquiries in a short period of time makes you look desperate for credit and therefore a home loan red flag. Ironically, this can also make it harder for you to refinance.

Can you refinance a mortgage with negative equity?

Negative equity means you owe more debt on your property than it’s worth. 

Most home loan lenders have home equity requirements for refinancers, so unfortunately, if you have negative equity, it’s unlikely that you can refinance until your equity improves. 

As a rule of thumb, it’s good to have at least a loan-to-value ratio (LVR) of at least 80% to refinance (20% equity).

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Evlin DuBose

RG146
Senior Money Writer

Evlin is RG146 certified for general advice (Tier 2) and has become a leading voice in finance news since joining Mozo two years ago. She is regularly featured in Google's Top Stories alongside major publications like News.com.au and Yahoo Finance, and seasoned journalists. Despite being in the industry for just two years, she is Mozo's go-to writer for all things RBA and her research has been referenced by the Victorian Government. With a Bachelor of Communications degree from UTS, where she won the Dean's Merit Award and acted as the Director of Student Publications.

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JP Pelosi

RG146
Managing editor

Jean-Paul (JP) Pelosi is an experienced journalist and editor who has contributed to many of Australia's leading media outlets including The Guardian, News.com.au, Domain.com.au, Investment Magazine and ANZ's Bluenotes. He has also edited news and communications for large financial services companies such as CommBank, Suncorp, Allianz and Amex. He likes a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.

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