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Home Loan Refinancing Interest Rates Guide

Rates and fees last updated on

Seek help when comparing one of the most important home loan features

While some Australians refinance to seek better features or customer service, many borrowers switch to seek a competitive rate in an effort to lower their mortgage repayments.

The interest rate attached to your refinanced mortgage can determine the amount you can save from switching and help you decide whether the savings outweigh the costs of refinancing.

When comparing the interest rate of a new mortgage, it's a good idea to speak with an experienced mortgage broker to help you make an informed choice and to ensure that you're getting the best deal possible.

Learn more about the costs of refinancing to decide whether it makes financial sense for you.

Refinance home loan rate comparison

Rates last updated October 21st, 2017
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Loan purpose
Offset account
Loan type
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.64%
3.66%
$0
$0 p.a.
80%
A basic home loan with a competitive rate and low fees.
3.65%
3.66%
$0
$0 p.a.
90%
Enjoy a low variable rate with no ongoing fees and borrow up to 90% of the value of the property.
3.64%
3.66%
$0
$0 p.a.
80%
A home loan with a competitive variable rate, limited fees and plenty of flexibility.
3.49%
4.47%
$0
$375 p.a.
90%
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.88%
4.89%
$0
$395 p.a.
95%
A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.65%
4.84%
$0
$395 p.a.
90%
A 2 years fixed platinum package that has $0 application and a loan redraw facility.
3.74%
3.74%
$0
$0 p.a.
80%
Combine a low variable interest rate and free redraw with no application or ongoing fees.
3.69%
3.72%
$0
$0 p.a.
80%
A low rate home loan with no ongoing fees.
3.74%
3.74%
$0
$0 p.a.
80%
A basic owner-occupier home loan with a low variable rate that requires a 20% deposit.
3.72%
3.74%
$0
$0 p.a.
80%
Take advantage of a 100% offset account along with no annual or application fees.
3.73%
3.73%
$0
$0 p.a.
90%
A special limited time offer for owner occupiers. An IMB Transaction Account must be opened with this loan.
3.86%
3.87%
$0
$0 p.a.
80%
Pay no ongoing fees on a competitive variable rate home loan.
3.99%
4.02%
$600
$0 p.a.
90%
Take advantage of a 0.60% discount on your rate, a 100% offset account and no ongoing fees.
3.97%
4.02%
$445
$0 p.a.
90%
Get a competitive rate without features you may not use.
3.84%
3.84%
$0
$0 p.a.
110%
Requires a family member to act as guarantor. Discounted rate available with family pledge loans. Family pledge loans require no LMI and no deposit. NSW, Qld and ACT only.
3.58%
3.59%
$0
$0 p.a.
80%
A competitive variable rate product with low fees offered by a 100% online lender.
3.64%
3.64%
$0
$0 p.a.
70%
A basic low-rate home loan that still offers some useful features.
3.77%
3.81%
$200
$0 p.a.
95%
A basic home loan with a low interest rate and a redraw facility available.
3.65%
4.10%
$500
$0 p.a.
95%
Get a discounted fixed interest rate for the first 12 months while you settle into your new loan.
3.74%
3.75%
$0
$0 p.a.
80%
A special variable rate home loan with no application or ongoing fees.
3.74%
4.15%
$0
$395 p.a.
80%
Enjoy a discount of a competitive interest rate and 100% offset account.
3.97%
3.99%
$0
$0 p.a.
90%
A great interest rate home loan offer with unlimited redraw and unlimited extra payments.
3.96%
3.98%
$0
$0 p.a.
90%
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
3.74%
3.74%
$0
$0 p.a.
90%
A competitive variable rate with a redraw facility. NSW, QLD and ACT residents only.
3.97%
3.97%
$0
$0 p.a.
80%
A competitive variable rate home loan with no ongoing fees.
3.84%
4.83%
$0
$0 p.a.
95%
Get a competitive 2-year fixed rate with no application or ongoing fees.
3.72%
4.19%
$0
$0 p.a.
80%
Enjoy a variable 3 year introductory rate with the Bankwest Equaliser Home Loan.
3.64%
4.03%
$0
$395 p.a.
95%
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
4.09%
4.12%
$0
$0 p.a.
80%
Access the equity in your home with a competitive interest-only rate and no application fee.
3.99%
4.02%
$395
$0 p.a.
80%
A flexible low-rate variable home loan that lets you combine your loan with other financial products.
3.69%
4.45%
$0
$375 p.a.
90%
Discount off an already competitive 2 year fixed rate for loans over $150k. NSW,QLD and ACT residents only.
3.83%
3.83%
$0
$0 p.a.
70%
A special low variable rate for owner occupiers with 100% offset account and no application or ongoing fees.
3.89%
3.91%
$0
$0 p.a.
80%
Package your owner-occupied loan with your investment loan and enjoy low rates for both.
3.79%
3.92%
$0
$10 monthly ($120 p.a.)
80%
A competitive variable rate home loan with flexible features. You can earn 30,000 Velocity Points for every $100k you borrow (for a limited time, subject to eligibility requirements).
4.09%
4.11%
$0
$0 p.a.
80%
A low variable rate loan with no application or ongoing fees.
4.19%
4.19%
$0
$0 p.a.
90%
100% offset account, unrestricted additional repayments and no monthly account keeping fees
3.69%
4.00%
$0
$350 p.a.
95%
Fix your rate for 3 years and borrow up to 95% LVR.
3.99%
4.77%
$0
$0 p.a.
95%
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
3.94%
4.88%
$0
$0 p.a.
95%
Enjoy a low interest rate and borrow up to 95% (with LMI) of your property's value.
4.33%
4.33%
$363
$0 p.a.
70%
A variable home loan with $0 annual or monthly fees.
3.80%
3.81%
$0
$0 p.a.
95%
A no frills loan with a competitive rate and a maximum LVR of 95%.
4.03%
4.07%
$0
$0 p.a.
95%
Enjoy a basic home loan with a high LVR and no application or ongoing fees.
3.88%
4.47%
$0
$0 p.a.
95%
This competitive introductory rate is a limited time offer for new owner-occupiers
3.68%
3.69%
$600
$0 p.a.
90%
Get a low variable rate along with some important basic features.
3.79%
3.79%
$0
$0 p.a.
80%
Minimum loan amount for this basic home loan is $750001.
4.39%
5.42%
$300
$10 monthly ($120 p.a.)
95%
Lock in a fixed interest rate term for repayment certainty.
3.69%
4.03%
$0
$299 p.a.
80%
Enjoy a low variable rate with no application fee.
3.99%
4.99%
$0
$395 p.a.
95%
A package home loan with fee free extra repayments available during the fixed term.
3.85%
4.95%
$0
$395 p.a.
95%
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cashback available for refinancers. Conditions apply.
3.88%
4.88%
$0
$395 p.a.
95%
Lock in a discounted fixed rate with a low service fee.

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What is a home loan refinancing interest rate?

This is the interest rate of the new home loan that you switch to. It is usually either fixed or variable and it is not to be confused with the comparison rate.

The interest rate indicates what your mortgage repayments will be and the comparison rate takes into account the fees and charges of the loan, as well as your repayments.

As a result, the comparison rate can be useful when comparing different home loans as it reflects the true cost of the loan.

What are the types of interest rates you can refinance to?

Home loan rates that you can refinance vary according to the type of mortgage you are applying for, but the most common reason a home buyer refinances is to take advantage of a lower interest rate and this can be obtained by:

  • Replacing a fixed rate loan with a variable rate loan in times of falling interest rates.
  • Refinancing to a shorter loan term e.g 25 years vs 30 years.
  • Changing from a variable rate loan to a fixed rate loan if rates are rising.
  • To reduce general debt repayment costs by using the equity amount in the property to pay out all existing debt and paying off the new mortgage with a lower interest rate than before.
  • To free up cash or equity to pay off other debts such as credit cards, personal loans and car loans.

How does refinancing work?

refinance interest rateRefinancing involves replacing an existing mortgage with another either with your existing lender or with a new lender. When refinancing, many borrowers simply negotiate a better rate with their existing lender while some will approach a new lender.

Borrowers are often motivated to refinance in order to obtain a lower rate or fees in order to minimise their periodic repayments or account-keeping fees. The new interest rate that you receive with the home loan that you switched to is the refinance rate which is an indicator of your home loan repayments.

Does a lower rate make a difference?

Opting for an interest rate that's even just 0.5% lower than your existing rate could lead to significant cost savings over your mortgage term.

For instance, if you took out an average mortgage of $471,000 at an average standard variable rate of 5.35%, and negotiated for a lower rate of 4.85%, you could save approximately $144 each month or $1,700 each year.

This would amount to a staggering saving of $52,000 over the life of your loan.

If you put the $144 savings back into your new mortgage in additional repayments, you would save almost $56,000 in interest and you would pay off your loan 3 years and 5 months sooner.

Use our calculator below to determine what a different interest rate will do to your repayments.

Pros and cons of refinancing to a better interest rate

Pros

  • Lower repayments. As illustrated above, a lower rate (even 0.5% lower than your current rate) can result in significant cost savings via lower monthly repayments.
  • Shorter loan term. Refinancing to a mortgage with a lower interest rate can also enable you to pay off your home loan sooner if you use the savings to make additional repayments.

Cons

  • Fees. Refinancing can be a costly process as you'll need to pay discharge or transfer fees to exit your current home loan as well as upfront application fees charged by the new lender. This is why it's important to consult a licensed mortgage broker to help you crunch the numbers so you can ensure that refinancing will benefit you financially. You can use our switching cost calculator to estimate your refinancing costs.

Things to avoid when it comes to refinancing a home loan

  • Ignoring personal situation. Be clear about what your plans are for the near future. For example, if you plan to move in two years it might not be a good choice to fix a competitive loan for three years. Leaving this type of loan early will come with expensive break fees.
  • Not crunching the numbers. Refinancing to a new lender will usually come with a discharge fee from your current lender and a range of upfront fees from your new lender, so be sure that the savings from the lower interest rate will outweigh these switching costs. Alternatively, wait until there's a home loan with a cashback promotion that you can use to reduce the upfront costs of switching.
  • Not seeking advice. If you're thinking of refinancing, it's a good idea to speak with an accountant and a mortgage broker to help you through the process. You need to make sure that refinancing to a new mortgage will lead to significant cost savings and that the new mortgage type will suit your future lifestyle.
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Refinancing to a new home loan with a competitive rate is a sound way to lower your repayments and pay off your mortgage sooner, just make sure you carefully consider the costs involved by speaking with the experts.

Marc Terrano

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

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