Rate rise or refinance? The choice is yours

By Mozo ·

Australian's have enjoyed some seriously low home loan rates for a long time, but the winds may finally be changing with recent indications from RBA Governor Philip Lowe hinting that a rate rise may finally be on the way. 

So, will you be up for a rate increase or is now the time to join the rush of refinancers and seek out a better deal?

Analysis by Mozo shows a borrower with a loan of $300,000 switching from the current* average variable rate in the Mozo database of 4.35% to the lowest variable rate of 3.39% could save a refinancer $1,896 over 12 months.

Home Loan Comparison Table - last updated January 23, 2021

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • Smart Booster Home Loan

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

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    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.

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  • mozo-experts-choice-2020
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.75% p.a.
    fixed 3 years
    2.22% p.a.

    $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.

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  • mozo-experts-choice-2020
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a. variable
    2.19% p.a.

    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.^

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    Details
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a.
    fixed 3 years
    2.53% p.a.

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

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    Details
  • Fixed Home Loan Special Offer

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    2.94% p.a.

    Competitive low rates starting from 1.89% (2.94% comparison rate) 2 years fixed for owner occupiers. No monthly account keeping fees & No loan establishment fee.

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Demand for fixed rate loans is also likely to increase as borrowers look for certainty when it comes to their monthly repayments, with a number of competitive fixed rate deals currently on offer.

Potential refinancing savings: 

Current loan type Rate New loan type Rate Annual Saving
Average variable rate 4.35% Best variable rate Reduce 3.39% $1,894
Average Big 4 variable rate 4.62% Best variable rate Reduce

3.39% $2,445
Average variable rate4.35%Best fixed rate (3yr)Easy Street3.69%
$543
Average Big 4 variable rate 4.62% Best fixed rate (3yr)Easy Street 3.69%1,095
The above rates are based on an 80% LVR loan of $300,000 to owner occupiers over a 25 year term as at 15/10/15. Source: Mozo.com.au

Mozo’s top refinancing tips

It’s clear there are savings to be had by shopping around on your current home loan rate but remember to follow these rules of thumb when refinancing.

- While it’s tempting to switch to a lower variable rate, research whether the new lender offers consistently low rates 

- Weigh up whether your savings by switching will pay for the costs associated with refinancing (e.g discharge fees and any upfront charges) within the first 12 months

- Consider a fixed rate , they’re at all time lows and with rate rises looming, it could be a good time to lock in a consistent low rate

^See information about the Mozo Experts Choice Home Loans Awards

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