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Information verified correct on October 26th, 2016

One in three homeowners kick off the New Year by ditching their lender

  • One in three borrowers refinancing their home loan in January 2014
  • Fixed home loans rising in popularity as fixed rates hit a new low!
  • More borrowers expected to rush in and fix when rates rise

March 12, 2014, Sydney: One in three borrowers are taking advantage of low interest rates and kicking off the New Year by ditching their lender, according to a new analysis of Australian Bureau of Statistics (ABS) data by one of Australia’s biggest comparison websites

Despite a slight drop in the proportion of home loans refinanced in January 2014 (31 percent) compared with January 2013 (32 percent), refinanced loans is among the highest levels ever recorded, with a total of 13,737 loans refinanced in January.

While first home buyers continue to be squeezed out of the market, with the proportion of first home buyer loans financed in January 2014 at 13 percent, which is among the lowest levels since September 2012 (19 percent).

The research also found a spike in borrowers fixing their home loan, with almost 2,000 more fixed loans financed in January 2014 (6,717) than January 2013 (4,787). The proportion of fixed loans also rose to 15 percent in January 2014, from 12 percent the year prior.

Michelle Hutchison, Money Expert at said she’s not surprised that a high number of borrowers are switching their home loans and taking advantage of the low rates on offer.

“It would be difficult for borrowers to sit back and not be tempted to switch their home loan, while so many lenders are cutting their rates.

“For instance, we recorded nine lenders – including major banks ANZ and Westpac – which lowered their variable home loan rates by more than the last rate cut of 0.25 percentage points. This biggest drop over the last cash rate cut of 0.25 percentage points in August was by Adelaide Bank, by an extra 0.22 percentage points.

“Of these nine lenders, five of which dropped their variable rates out of cycle this year including Citibank, HSBC, Bank of Queensland, eMoney and Homeloans.

“Also fixed home loan rates are still falling, with some reaching new lows. The average three-year fixed rate has fallen by 0.07 percentage points this year to 5.11 percent and you can find one-year fixed rates for as low as 3.99 percent by IMB – that’s the lowest I’ve ever seen a fixed rate home loan!”

Mrs Hutchison said more borrowers are likely to take advantage of the increased competition and look to refinance their home loan, while fixing will increase when interest rates rise.

"Borrowers are in a sweet spot with more competitive offers such as low rates and incentives to continue this year.

“Currently, variable rates range from 4.49 percent up to almost 9 percent and there are over 100 variable home loans below 5 percent.

“With the average variable rate of 5.39 percent and the lowest at 4.49 percent, you could be paying 0.90 percentage points more for your home loan. That’s worth an extra $164 in monthly repayments for a $300,000 loan with a 30-year term.

“This year, we’re expecting more borrowers to switch and fix their home loan, with the proportion of refinanced loans financed likely to hit at least 33 percent by the end of the year if the cash rate lifts, with the last interest rate hike in November 2010 saw the proportion lift by 2 percentage points.

“Homeowners shouldn’t let their money go to waste, there are big differences in interest rates and now is the time to look at how your loan compares to the rest of the market.


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The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on's review pages for the current correct values.

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