Refinancing Your Home Loan With Your Current Lender

The easiest way to get a lower rate

Refinacing your home loan with your current lender

Sometimes the quickest and cheapest way to get a good deal on your home loan is simply by asking. Often, a lender is able to discount your rate, especially if you're currently paying the standard variable rate and not receiving the discounted rates they offer.

Get in touch with your current lender and ask if they can match the leading interest rates in the market. If your lender is willing to slot you straight on a lower interest rate, then you have just made one of the easiest, cost saving moves possible.

Although, admittedly, borrowers don't always refinance simply to save on interest rates. According to the September 2012 MFAA CBA Home Finance Index, the most popular reason for refinancing is for home renovations (19.5%) followed by seeking a better deal/rate (17%) and debt consolidation (13.8%). So if you are refinancing, the chances are you aren't seeking a lower interest rate, but finance for a new purpose.

How to refinance your mortgage with your current lender

Before you call up your bank and try to negotiate a better deal, take some time to prepare yourself. Ideally, you want to find some deals being offered by other lenders that you would be eligible for if you so chose to switch.

Negotiation tip

Be realistic. If you are ineligible for the type of home loans you use as examples of lower rates to your lender, your negotiation will be flawed from the start. Don't be afraid to call other lenders offering cut price interest rates to get an impression of whether you would qualify for their home loans. Doing this homework would put you in a position of significant strength when you make your claim for a lower interest rate.

Know exactly what you want

Before you start negotiations, make sure you're happy with your current loan.

Decide whether you want a fixed interest rate or a variable rate. You also need to work out whether a no-frills basic home loan is right for your needs, or whether you want more features with your loan, such as an offset account or a redraw facility.

Look for discounts offered for 'professional packages' — which are discounts off their advertised interest rates for loans exceeding a certain amount, or for bundling other banking products with your home loan. Check the deals your own bank offers too.

When you've worked out exactly what you want in your home loan, compare the home loans other banks and smaller lenders have available. finder.com.au comparison tables will give you a good grasp of the type of fees that might apply to each loan. Then compare those to what you're getting from your own lender right now.

When you're armed with enough information, it's time to start negotiating.

About Home Loan Refinancing Guide and Loan Comparison

Get an idea of current interest rates

Rates last updated May 22nd, 2018
$
Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.69%
3.69%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
3.64%
3.67%
$0
$0 p.a.
80%
A mortgage with a competitive variable rate, limited fees and plenty of flexibility.
3.69%
3.69%
$0
$0 p.a.
70%
Pay no application or ongoing fees and get a flexible loan with the ability to split up to 6 times.
3.64%
4.03%
$0
$395 p.a.
80%
New borrowers or refinancers from another lender get a discounted rate with this package loan.
3.62%
3.62%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).
3.64%
3.64%
$0
$0 p.a.
70%
Get a discount for keeping your LVR at 70% or below with this innovative online lender.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
Get a 100% offset account to save on interest charges, and pay no application fee.
3.69%
3.71%
$0
$0 p.a.
80%
A great interest rate home loan offer with unlimited redraw and unlimited extra payments.
3.69%
4.06%
$0
$349 p.a.
90%
Package your loan with other AMP products and save on rates and fees.
3.70%
4.13%
$0
$395 p.a.
90%
Package your loan with an eligible credit card for discounts on rates and fees, and get a 100% offset account.
3.88%
4.89%
$0
$395 p.a.
95%
Low deposit home loan. Enjoy flexible repayment options while paying limited fees.
3.77%
3.81%
$200
$0 p.a.
95%
A simplified mortgage with a low interest rate and a redraw facility.
3.58%
3.58%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.69%
3.94%
$0
$248 p.a.
70%
Get a sharp rate and a 100% offset account. Borrowers must have a 30% deposit.
3.68%
3.69%
$0
$0 p.a.
95%
This variable rate loan offers flexible repayments and a redraw facility. Available with a 5% deposit.
3.79%
3.79%
$0
$0 p.a.
80%
Pay no application and ongoing fees with Macquarie Bank Basic Home Loan.
3.49%
4.49%
$0
$395 p.a.
90%
Loans over $150k get a discount off an already low fixed rate. Available for NSW, Qld and ACT residents only.
3.54%
3.58%
$0
$0 p.a.
80%
Eligible borrowers can get $1,200 cashback on this loan with a 100% offset account and a redraw facility.
3.69%
3.73%
$600
$0 p.a.
95%
Variable rate home loan from one of the big 4 banks. Available with just a 5% deposit.
3.74%
3.74%
$0
$0 p.a.
110%
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, Qld and ACT only.
3.79%
3.81%
$0
$0 p.a.
90%
Buy your home with just a 10% deposit, few fees and a reasonable interest rate.
3.69%
4.47%
$0
$395 p.a.
90%
A fixed rate loan with a 100% offset account and the option to make additional repayments. Loans over $150k receive a discounted rate. NSW, QLD and ACT residents only.
3.74%
3.74%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule.
3.65%
3.66%
$0
$0 p.a.
80%
This special rate loan comes with no application or ongoing fees, and offers a flexible repayment schedule.
3.78%
3.78%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a free redraw facility with this innovative online lender.
3.69%
4.11%
$0
$395 p.a.
80%
Save on interest with a 100% offset account and save on other ME products with this package loan.
3.89%
4.87%
$0
$0 p.a.
90%
Borrow up to 90% of the value of the property you're buying and pay no application or ongoing fees.
4.14%
4.81%
$0
$0 p.a.
80%
Pay no application fees and access a fee-free redraw facility with this fixed rate loan.
3.62%
3.62%
$0
$0 p.a.
95%
Free home and contents insurance for 1 year. Terms and conditions apply. QLD residents only.
3.99%
4.86%
$0
$0 p.a.
80%
Access a fee-free 100% offset account and pay no application or ongoing fees.
3.85%
4.05%
$0
$350 p.a.
95%
This high LVR fixed rate loan allows you to borrow up to 95% of the value of the property you're buying.
4.09%
4.11%
$0
$0 p.a.
80%
This variable rate loan keeps the features simple and fees low. This loan is offered by a 100% online lender.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
Earn Velocity Points on your mortgage (for a limited time, subject to eligibility requirements). Plus, access a 100% offset account to save on interest.
4.09%
4.12%
$0
$0 p.a.
95%
Buy a home with just a 5% deposit and get flexible repayment options and a redraw facility.
3.99%
4.03%
$0
$0 p.a.
95%
Buy a home with just a 5% deposit and pay no application or ongoing fees.
3.59%
4.42%
$600
$0 p.a.
95%
Get a 1% discount for the first two years of your loan and pay no application or ongoing fees.
3.68%
3.69%
$0
$0 p.a.
90%
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000.
4.39%
5.42%
$300
$10 monthly ($120 p.a.)
95%
Lock in a fixed interest rate term for repayment certainty.
3.89%
4.97%
$0
$395 p.a.
95%
Get discounts on a range of Commonwealth Bank products and enjoy the option of fee-free extra repayments during the fixed term.
3.89%
4.96%
$0
$395 p.a.
95%
Refinancers can get $1,500 cashback. Conditions apply. Package your home loan with a Qantas rewards earning Amplify credit card.
3.89%
4.88%
$0
$395 p.a.
95%
Refinance from your existing loan and get a $1,250 rebate. Terms and conditions apply. Plus get discounts on a range of Westpac products.

Compare up to 4 providers

Negotiating with your current lender to refinance your mortgage

Australian banks and lenders are increasingly responsive to competition. Especially over the last few years, where credit laws have reduced the barriers for borrowers to switch lenders. They need your business in order to stay in business.

However, benefits still seem to be skewed towards new customers. It is up to you to demand the same special treatment.

Many banks (but not all) are able to negotiate on their advertised interest rates. They're even able to negotiate for larger discounts than the ones they advertise off the standard variable loans and fixed rate loans they show on their websites. Businesses realise the benefit of retaining customers — as luring a new customer can cost thousands in marketing costs and promotional discounts.

The steps to refinancing with your current lender

Contacting your lender

Title

Call your lender and explain that you're preparing to refinance your mortgage to a different lender offering a better deal.

You should be transferred at this point to the customer retention centre. Those representatives are the people with the most influence when it comes to negotiating better terms on your home loan. Their entire job is to stop you from leaving and often have the discretion to offer you incentives to stay.

Explain the deal you've found with a different lender and point out that your own home loan isn't quite so competitive. Ask what the representative is able to do to compete with the offer you've found and to match the type of costs they'd expect to pay to gain a new customer as well as closing the gap on interest rates.

In some cases, they may be able to reduce your variable interest rate over the phone.

Remember

Some lenders may not be able to match the best interest rates on the market. If you are with a large bank or lender, they often can't match the low interest rates of online lenders as they simply have higher marketing, staff and branch costs.

Sometimes they'll happily switch you over from a variable rate over to the fixed interest rate you wanted, or they'll waive your monthly account fees, or they'll suggest a more competitive loan product they might have available. Other times, the person you're speaking to may need to discuss options with a supervisor before they can come up with an offer.

No matter which way you look at it, your current bank doesn't really want you to leave. They don't want you to refinance your mortgage to another bank. But if they can't offer you an interest rate you'll be happy with, it may be time to make a move elsewhere.

What happens when your bank won't negotiate?

There are times when your current bank simply won't negotiate a better deal with you.

application denied

A patchy repayment history may be one of those cases.

You may also find they'll be less inclined to negotiate with you if your home loan balance is quite high in comparison to your property value, because they know that they have you captive. Customers with less than 20% equity have to pay Lender's Mortgage Insurance in full again to switch lenders. Often this is prohibitively expensive.

If you've done your homework before making the decision to refinance, you should have an idea on the types of fees that may apply to a switch. Ask your current lender for a full quote on how much it will cost you actually switch before you decide to leave. If you've found a home loan that looks pretty attractive, work out if the prospective savings outweigh the switching costs.

Reasons to refinance

Here are some of the common reasons to refinance your home loan:

  • To finance a renovation
  • To get a cheaper interest rate
  • To get more features
  • Debt consolidation
  • When buying a new home
  • To buy an investment property
  • To use your equity in a line of credit

Why stay with your current lender?

What you might not realise is that there are always some fees and charges associated with a ditch and switch approach to refinancing. Those fees might include things like:

  • Discharge fees with your current lender
  • Early exit fees with your current lender
  • Application fees with the new lender
  • Settlement fees with the new lender
  • Valuation fees with the new lender
  • Government mortgage discharge fees
  • Lender's Mortgage Insurance fees

So it can be far cheaper, not to mention much more convenient, to stay with your current lender. By doing so, you can avoid all the above fees.

Tips for refinancing

  • Adjust your refinance term (if you originally took a 30 year loan, 5 years on, consider a 25 year loan when refinancing. This will keep your total cost from rising.)
  • Get a full quotation for costs involved
  • Be aware that if your Loan-to-Value Ratio (LVR) is above 80%, you'll have to pay Lender's Mortgage Insurance again if you switch lenders
  • If your credit record has worsened, new lenders may charge you more interest

Marc Terrano

Marc Terrano is a content marketer manager at finder. He's been writing and publishing personal finance content for over five years and loves to help Australians get a better deal.

Was this content helpful to you? No  Yes

Related Posts

Home Loan Offers

Important Information*
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special

Start your home buying journey with 2 years of fixed repayments and a reasonable rate from a big 4 bank. Available with a 10% deposit.

UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupied Variable P&I Rate — borrowing $700,000 or more

Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤90% ($150K+ Owner Occupier)

Loans over $150k get a discount off an already low fixed rate. Available for NSW, Qld and ACT residents only.

Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier, P&I)

New borrowers or refinancers from another lender get a discounted rate with this package loan.

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.

10 Responses

  1. Default Gravatar
    JamieMay 8, 2015

    Is it possible to refinance with the same bank a new mortgage and delete one of the borrowers (with their consent of course) and avoid lenders mortgage insurance (assuming lvr is above 80%)

    • Staff
      BelindaMay 27, 2015Staff

      Hi Jamie,

      Thanks for your enquiry.

      Each lender has different policies and criteria regarding LMI so it would be best to contact your lender directly to discuss your options.

      Thanks,
      Belinda

  2. Default Gravatar
    RayJuly 10, 2014

    Can your current lender refuse to cooperate with a new refinancing company?

    • Staff
      MarcJuly 10, 2014Staff

      Hi Ray,
      thanks for the question.

      If this is occurring please contact the office of fair trading for your state, and inform them of the situation. If your account has been settled there shouldn’t be any reason why a bank wouldn’t cooperate with the lender you’re refinancing to.

      I hope this helps,
      Marc.

  3. Default Gravatar
    YvonneJune 25, 2014

    I have a loan against my home which in payed lmi on. I have now sold this and purchased a new home and will use the sale proceeds to settle on the same day as sale. Can I transfer my existing lmi loan to the new property through the same bank to save paying lmi again or do I need to pay lmi again. Lvr would be 90% on the new property?

    • Staff
      ShirleyJune 27, 2014Staff

      Hi Yvonne,

      Thanks for your question.

      Unfortunately LMI is generally not transferrable; you may be able to get an exemption from your lender but in most cases you’ll need to pay it twice.

      Cheers,
      Shirley

  4. Default Gravatar
    krisOctober 5, 2013

    i have 2 investment properties and am currently financing my home loan with the same lender,the bank has suggested i combine my investment property loans for a better , is there any reason why i should do this and why cant i have the better interest rate without combining my loans, i have thought that it may be a problem with my tax claims if i combine loans also if may be a problem if i want to sell one investment property, any tips please

    • Staff
      ShirleyOctober 7, 2013Staff

      Hi Kris,

      Thanks for your comment.

      A lot of lenders offer packages that have a discounted interest rate. Sometimes for the sake of convenience people like to combine all their home loan products into one but ultimately you need to decide whether this will suit your investment strategy.

      In this case it may best to direct your question at a mortgage broker or financial planner.

      Hope this helps,
      Shirley

    • Default Gravatar
      krisOctober 7, 2013

      Hi Shirley, Thank you so much for your reply, I have negotiated a better interest rate with keeping the loans seperate. Seems the bank offered to combine my loans to give me a better interest rate but only If i borrowed extra funds on each of the loans and put the funds into a redraw account. thanks kris

    • Staff
      ShirleyOctober 7, 2013Staff

      Hi Kris,

      Thanks for your comment.

      No worries, always happy to help. It’s up to you to decide whether the extra funds borrowed and the redraw facility is worth the discounted interest rate. If you’re unsure it’ll probably be best to seek professional advice.

      Cheers,
      Shirley

Ask a question
Go to site