Refinance Home Loan Rates Comparison

What are the benefits of refinancing?

Here are some common reasons for refinancing and the benefits making the switch can offer:

Is mortgage refinancing popular?

Thousands of Australian home loan borrowers refinance their mortgages every month, with the number peaking in 2023 – around the same time the RBA cash rate hit its recent high.

The majority of refinancers make the move to a new bank or lender (known as external refinancing), but plenty refinance to a new product with their same lender (internal refinancing).

As of June 2025, the median home loan being refinanced externally has a value of around $624,000, while the median internally refinanced home loan is just over $560,000. Property investors tend to refinance larger loans than owner-occupiers on average.

Can refinancing save me money?

By refinancing your loan you can reduce the amount of interest you pay. That can have two effects: it will reduce the size of your regular repayments and may minimise how much interest you pay over the life of your loan.

Every repayment has two parts: Principal (what you owe) and interest (the cost to borrow). A lower rate reduces the interest charged each period and could save you significantly over the years to come.

Additionally, lengthening the loan term can reduce the size of your repayments. However, it also changes how quickly you pay down principal – a shorter term = higher repayments but less interest overall, while a longer term = lower repayments but more interest over the loan's life.

How much money could you save by refinancing?

How big of an impact can securing a lower interest rate glean? Here's an example:

Jean owes $500,000 on a 30-year mortgage at a rate of 6.80% p.a. Her mortgage looks like this:

• Approx. monthly repayment: $3,260
• Approx. total interest over the loan: $673,500

If Jean were to refinance to a home loan with a rate of 5.80% p.a. it would look like this:

• New monthly repayment: $2,935 ($325 less)
• Approx. total interest: $556,000
• Savings realised over the life of her mortgage: $117,500

Here's a breakdown of how the repayments and interest accrued on a $500,000, 25-year home loan can vary depending on the interest rate applied:

Wondering how much you might save from refinancing? Crunch the numbers using Your Mortgage's Mortgage Repayment Calculator

How much does refinancing cost?

Refinancing can save you money in the long term, but the process isn't free.

Costs associated with refinancing can include:

• Exit or break fees (especially when refinancing from a fixed loan)
• Application or establishment fees
• Settlement or handling fees
• Valuation fees (if applicable)
• Lenders Mortgage Insurance (LMI) if your loan-to-value ratio (LVR) is more than 80%

See also: How much does it cost to refinance your home loan?

As a rule of thumb: if your savings won't see you recouping switching costs within ~12 months, consider waiting or negotiating harder.

How to refinance a home loan?

Here's a simple checklist to help you get started on your refinancing journey:

1. Take stock of your situation
   Take the time to check in on your property's potential value and your current loan balance to work out your LVR. Then, assess your current home loan interest rate and features and note what you'd like in a new mortgage.

2. Compare your mortgage against the market
   Take a look at many of the market's most competitive home loan deals in the table above, and make sure to use the filters to find products that fit your needs. Compare what's on offer against your mortgage. If yours is lagging, it's probably worth taking action.

3. Ask your current lender if it can strike you a deal
   Before getting too far into the weeds, it's often wise to present your findings to your current lender and ask if it could adjust your home loan. It may sharpen the pencil to keep you.

4. Apply to refinance your mortgage
   Once you've decided on the best home loan option for you, prepare all the needed paperwork, submit your application, and wait for approval.

5. Enjoy your new home loan
   If you are switching lenders, your new and old lender will take care of the process after you get approval.

Mortgage refinancing red flags

Before you commit, watch out for these common pitfalls:

Resetting your home loan term

Some lenders will reset your home loan term back to 25 or 30 years by default, even if you've already been making repayments for years or even decades. While this can shrink your regular repayments, stretching your mortgage over a longer period will see you pay more interest overall.

LMI traps

Refinancing without significant equity – or topping up your loan as part of the process – can push your LVR above 80%. If your equity falls below 20%, you may be hit with a new LMI premium. Make sure to factor this into your refinancing costs.

Fixed-rate break fees

Exiting a fixed-rate home loan before the term ends can trigger break fees, which can range from nothing to thousands of dollars. Be especially cautious if your fixed rate is higher than current market rates, as your lender may incur a loss and pass those costs on to you.