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Time to Refinance to a Better Deal

A $400 billion home loan refinance race is on across Australia! With repayments on the average $600K home loan are up more than $600 in four months!

That’s the effect of the rate increases we have already seen and there are likely to be at least a couple more to come.

It all has a lot of Aussies frantically fixing their home loan rates. But stop… the other vital piece of information that the money markets are telling us is that this hike-cycle will peak in the middle of next year and then rates will actually start to fall.

Adding weight to this futures forecast is the fact a number of lenders last week dramatically cut their longer-term fixed rates. Most of the cuts were for four-year periods and beyond, with CBA lopping 1.6 percentage points off the top, to a rate of 4.99%. That’s well below its package variable rate of 5.6%.

But remember, you should be getting a discount from that headline rate. The bottom line is that with any fix now, your repayments will be much larger than the variable rate.

And if the cash rate only has a little bit higher to go, as the market thinks right now, you may well be stuck paying more for the duration of a fix.

So how can you cut your variable costs?

The cheapest variable rates in the country

An under-the-table, unpublished discount from a big bank is unlikely to ever match the what-you-see-is-what-you-get rate of the best lender on the market.

The fact is that the pandemic mortgage price war has created a massive gulf between the big four variable rates and the cheapest, still-quality loans in the market.

With the 50bps rate rise from last Tuesday yet to flow through to most products, the Big 4 average discounted rate is still 4.7 per cent (all four banks have announced a straight 50 basis point increase).

That’s a full 166 basis points above the cheapest loan with an offset account, 3.04%

That is a $545 difference on the average monthly mortgage repayment.

So, a simple refinance almost entirely wipes the hikes the Reserve Bank of Australia (RBA) has imposed so far.

Australia’s 5 best-value variable rate loans

As finance brokers we are experts on home loans and where you can get the best deal.

Our low-rate home loan picks*

1. Lender A 3.04%

2. Lender B 3.14%

3. Lender C 3.14%

4. Lender D 3.14%

5. Lender E 3.18%

* Subject to meeting individual bank criteria. More information available on request.

Do yourself a favour and ring Amanda today to get an obligation free assessment by calling 1300 861 143 or 0439 739 997 or email to

Your Choice Mortgage Brokers Pty Ltd ATF Halo Innovation Trust trading as Heart Mortgage Services - Australian Credit Licence 38643.

The information contained herein is of a general nature only and does not constitute advice. You should not act on any information without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances. The views expressed here are not ours. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties who are not related to us. These links are provided for convenience only and do not represent any endorsement or approval by us.

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