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Refinance your home loan to benefit from interest savings

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Don’t settle for second best. Scout for a competitive rate and refinance your home loan today.

Refinancing your home loan can provide you with substantial cost savings, so if you find a better deal, it’s worth switching to a different lender. In recent years the refinancing process has become increasingly streamlined and efficient, allowing Australian borrowers to benefit from competitive offers and refinance with ease.

In a competitive and saturated marketplace, there are many attractive features, deals and rates offered with mortgage products which is why it pays to do some research to find the best loan for you. Just ensure that you consider the switching costs involved before making the move.

A complacent culture: Australians forgo significant savings

With the cash rate at a historic low of 2.0% and with the banning of exorbitant exit fees with variable home loans in 2012, it’s surprising that so many Australians aren’t taking advantage of the competitive home loan market.

Our recent study found that 54% of Australian borrowers are content with their lender and over 1 million Australian households have not switched lenders. These borrowers have collectively wasted a staggering $9.9 billion by not taking the time to find a more competitive deal.

For the individual borrower, mortgage holders could be potentially wasting $280 per year or $8,415 over a 30-year loan.

If you’re looking for advice about whether or not you should review your existing home loan, see what the experts have to say.

Why should I refinance my home loan?

Despite popular belief, refinancing your home loan is not expensive, difficult or time-intensive. Here are some of the key reasons why you should consider switching:

  • Significant savings. According to our study about 39% of mortgage holders have not switched providers in the past decade and these households have forgone a combined $27.4 million per month or $328.2 million per year. If you find an interest rate that’s even just 0.05% lower, it could dramatically reduce the interest payable over the life of a 30 year loan.
  • Simple process. The refinancing process has become much more streamlined and efficient in recent years and with high levels of competition within the home loan industry, many lenders are willing to negotiate to retain their customers. As a result, there are product service teams that are often willing to offer you more competitive rates if you simply strike up the conversation with them.
  • Inexpensive. While your existing lender may charge an exit fee of around $300 - $450 and your new lender may also charge an application fee (keep in mind that most lenders waive the application fee), the lower amount of interest that you would pay with a lower rate over 30 years is likely to outweigh these switching costs. In addition, many lenders offer unique promotions where they often waive account fees for a certain period of time. You can use a switching costs calculator to see whether it’s worth refinancing.
  • Comparison tools. Use our comparison tables and guides to compare different home loans side-by-side to help you make an informed decision. There are many reliable resources that you can use to research different home loan products, it’s just a matter of doing some research.

How can I switch my home loan?

1. Compare your home loan

Use our comparison table below to see if there are any better offers on the market compared to your current home loan. If there are lower interest rates or more suitable features that complement your borrowing needs, simply click on the ‘enquire now’ button to be redirected to the lender’s application page where you can complete the application online.

Rates last updated August 20th, 2017
Loan purpose
Offset account
Loan type
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Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier Special Rate, P&I)
Owner-occupiers can lock in a competitive rate with no ongoing fees. Conditions apply.
3.74% 4.85% $0 $0 p.a. 95% Go to site More info Essentials - Variable (Owner Occupier, P&I)
A basic home loan with a competitive rate and low fees.
3.64% 3.66% $0 $0 p.a. 80% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.49% 4.47% $0 $375 p.a. 85% Go to site More info
UBank UHomeLoan Variable Rate - Standard Variable Rate Value Offer (Owner Occupier P&I)
Combine a low variable interest rate and free redraw with no application or ongoing fees.
3.74% 3.74% $0 $0 p.a. 80% Go to site More info
Reduce Home Loans Rate Buster 100% Offset Variable Home Loan - Up to $750k (LVR <=80%)
Borrow up to 80% LVR with no ongoing fees and a 100% offset account.
3.54% 3.54% $440 $0 p.a. 80% Enquire now More info Offset Variable - Up to 80% LVR (Owner Occupier P&I)
Take advantage of a 100% offset account along with no annual or application fees.
3.72% 3.74% $0 $0 p.a. 80% Go to site More info
IMB Budget Home Loan - Special LVR <=80% (Owner Occupier and Principal & Interest only)
A special limited time offer for owner occupiers. An IMB Transaction Account must be opened with this loan.
3.79% 3.84% $445 $0 p.a. 80% Go to site More info
Bank Australia Basic Home Loan - Variable (Owner Occupier)
A competitive variable rate that allows borrowers to borrow a minimum of $100,000 with a $0 ongoing fee.
3.86% 3.87% $0 $0 p.a. 80% Go to site More info
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy a low variable rate with no ongoing fees and borrow up to 90% of the value of the property.
3.85% 3.86% $0 $0 p.a. 90% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special
A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.69% 4.86% $0 $395 p.a. 90% Go to site More info

2. Contact your lender

Once you’ve found a cheaper interest rate you should contact your existing lender to see whether you can negotiate a better deal. Ideally, the lender will be able to match or exceed the interest rate that you’ve found. Most lenders have customer service teams that can offer you incentives and discounts to retain your business. However, if the lender is unable to negotiate the terms of your home loan to your satisfaction, then it may be time to switch.

3. Interest savings vs. switching costs

Ideally, the savings in interest with the new home loan should outweigh any switching fees that may result from refinancing.

  • Estimate interest savings. For borrowers on variable home loans, switching could result in significant cost savings. For example, for a $400,000 mortgage over a 25 loan period, refinancing to a rate 0.5% less than a 5.70% loan will save you $119 on your monthly repayments. This means you would save a total of $1,428 each year.
  • Review exist costs of current loan.To discover your current loan exit costs, contact your lender and request a full cost quote.
  • Review entry costs of new loan. To find out the entry costs of your new loan (e.g. application fee) is as simple as looking up the costs of the product on or contacting the lender directly.
  • Switching costs analysis. Add these two figures together. If the costs and ongoing loan costs are less than two years worth of interest rate savings, then, for many situations it could be worth switching to reap the interest rate savings. Use our refinancing calculator below to get an idea of your switching costs.

Refinancing Tips

  • Review your credit file. To increase your chance of new loan approval, it’s worth viewing your credit file to see if there are any entries that have occurred since you last acquired a home loan. If you have any marks against your credit file, this could inhibit the likelihood that you’ll be approved for the new home loan.
  • Independent property valuation. Homeowners are notorious for overestimating the value of their home. Many people don’t realise that a fall in their house price could push them into LMI territory when they go to refinance. If you could be in anyway close to a 80% LVR, seek an independent property valuation prior to refinancing.
  • Apply for one loan at a time. Some people think they are being thorough by applying for many home loans at the one time to ensure they are speedily accepted for a competitive option. However, when you apply for a home loan, the lender will check your credit record — this enquiry by the lender itself is recorded on your credit record. The more hits on your credit record, the lower your chances of being approved for a loan.

When is it not worth switching?

Although this will vary depending on your personal and financial situation, it may not be worth refinancing your mortgage for the following:

Refinancing can be a straightforward process that allows you to switch from one lender to another in order to leverage a more competitive interest rate over the life of a loan. With an abundance of comparison tools, online resources, and competitive rates on offer, refinancing your home loan is simple.

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Marc Terrano

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at Talk to him to find out more about home loans.

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Bank Australia Basic Home Loan - Variable (Owner Occupier)

A competitive variable rate that allows borrowers to borrow a minimum of $100,000 with a $0 ongoing fee.

NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I)

A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)

Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.

IMB Budget Home Loan - LVR <=90% (Owner Occupier)

Get a competitive rate without features you may not use.

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