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Considering refinancing? These are some of the lowest refinancing home loan rates
The Reserve Bank of Australia has hiked the cash rate yet again by 25 basis points at its first meeting in February 2023, bringing the cash rate to 3.35%.
If you’re one of millions of Australian homeowners watching their variable rate mortgage repayments soar, you may be considering refinancing. This may also be the case for homeowners that fixed their home loan rate at 1-2%, but now their fixed term is coming to an end shortly in a much higher environment.
Whatever your reason for refinancing, choosing a lower interest rate is one way that you can help to reduce your mortgage repayments. The interest charged on your home loan is one of the most significant factors impacting the cost, and by switching to a lower rate, you could give yourself a rate cut.
According to the RateCity database, these are some of the lowest variable refinance rates for owner-occupiers and investors (paying principal and interest).
Owner-occupiers: lowest variable rates (paying principal and interest)
Home loan | Interest rate | Comparison rate |
3.99% | 3.99% | |
4.44% | 4.35% | |
4.44% | 4.47% | |
4.46% | 4.48% | |
4.46% | 4.48% |
Source: RateCity.com.au. Data accurate 03/02/2023. Note - Rates may fluctuate with the latest rate change.
Investors: lowest variable rates (paying principal and interest)
Lender | Interest rate | Comparison rate |
4.39% | 4.39% | |
4.66% | 4.68% | |
4.69% | 4.74% | |
4.69% | 4.70% |
Source: RateCity.com.au. Data accurate 03/02/2023. Note - Rates may fluctuate with the latest rate change.
Following the February cash rate hike, it is likely that some or all of these interest rates will rise by 0.25% in the next few weeks. That being said, by starting with a lower-rate option in a rising-rate environment, your budget may be able to weather the storm a little easier.
Variable Rate Home Loan LVR < 80%
- Owner Occupied
- Variable
- 20% min deposit
Receive an extra 0.01% p.a. discount every year, up to a maximum discount of 0.30% p.a.
Built by CBA, this home loan deal allows borrowers who refinance benefit from an ongoing loyalty discount
5.99%
5.90%
How much could you save by refinancing?
RateCity research shows that if a homeowner refinanced from the current average ongoing RBA mortgage interest rate to the lowest owner-occupier rate, they may be able to save hundreds in annual interest repayments.
By switching from the RBA’s current average existing customer interest rate of 5.29% to the lowest variable rate on our database of 3.99%, you may be able to save:
- $446 in repayments in the first month, and
- $5,352 in interest in the first year (assuming no other rate changes occurred - does not include fees).
Hypothetical savings from refinancing a $600k home loan
Loan | Interest rate | Monthly repayments | Annual payment |
Loan A - before refinancing | 5.29% | $3,610 | $43,320 |
Loan B - after refinacing | 3.99% | $3,164 | $37,968 |
Difference | -1.30 | $446 | $5,352 |
Source: RateCity.com.au, RBA current average customer interest rate. Hypothetical example does not factor in future rate increases or fees.
The amount you could reduce your monthly mortgage payments will depend on your loan amount and current interest rate, as well as any ongoing fees your lender may charge. Also, keep in mind that three out of four big banks predict that the cash rate will continue to hike throughout 2023, so the potential annual savings may differ.
You will also need to ensure you meet the criteria and lending conditions of the interest rates listed above to qualify. Be sure to read the terms and conditions before you consider applying.
- Don’t forget if the process of refinancing feels too intimidating, you can always pick up the phone and ask your lender to drop your interest rate. Banks and lenders often offer lower interest rates to new customers, and there’s nothing stopping you from asking them to match this rate for you. Use our helpful guide and script to negotiate a lower home loan rate today.
How easy is it to refinance your home loan?
Generally speaking, the refinancing process can take between two and four weeks, depending on your financial situation and the lenders involved. This is because a lender will be assessing your home loan application again, and you will need to go through the settlement process again if you’re switching lenders.
That being said, the refinancing process is becoming easier and easier every year, especially if you consider refinancing to an online-based lender that prioritises streamlined applications. You can also make the process of refinancing quicker by organising your documents needed ahead of time, including:
- Past mortgage statements
- Employment details and payslips
- Identification details
- Details of any other assets or liabilities
- Bank statements
Even if the process can take a little time, it’s worth keeping in mind that the potential benefits could outweigh the effort involved.
Compare home loans in Australia
5.99%
5.90%
$3,218
Australian Credit Licence 234945
Fees & charges apply
- 2024 Award Winner
- Special
- Owner Occupied
- Variable
- 20% min deposit
- P&I
5.99%
6.04%
$3,218
Australian Credit Licence 393283
Fees & charges apply
- Owner Occupied
- Variable
- 50% min deposit
- P&I
7.36%
7.41%
$3,650
Australian Credit Licence 230686
Fees & charges apply
- Investor
- Variable
- 10% min deposit
- P&I
7.24%
7.55%
$3,611
Australian Credit Licence 243099
Fees & charges apply
- Owner Occupied
- Variable
- 10% min deposit
- P&I
6.01%
6.14%
$3,225
Australian Credit Licence 237879
Fees & charges apply
- Special
- Owner Occupied
- Variable
- 10% min deposit
- P&I
6.19%
6.54%
$3,280
Australian Credit Licence 234517
Fees & charges apply
- Owner Occupied
- Variable
- 40% min deposit
- P&I
6.99%
7.00%
$3,531
Australian Credit Licence 395219
Fees & charges apply
- Investor
- Variable
- 30% min deposit
- P&I
6.23%
6.38%
$3,292
Australian Credit Licence 244616
Fees & charges apply
- Cashback
- Owner Occupied
- Variable
- 20% min deposit
- P&I
6.59%
6.60%
$3,404
Australian Credit Licence 233714
Fees & charges apply
- Cashback
- Owner Occupied
- Variable
- 5% min deposit
- P&I
6.84%
7.16%
$3,611
Australian Credit Licence 233714
Fees & charges apply
- Owner Occupied
- Variable
- 5% min deposit
- P&I
6.69%
6.70%
$3,436
Australian Credit Licence 234945
Fees & charges apply
- Owner Occupied
- Variable
- 30% min deposit
- P&I
5.84%
5.89%
$3,173
Australian Credit Licence 388053
Fees & charges apply
- Owner Occupied
- Variable
- 40% min deposit
- P&I
Product database updated 28 Apr, 2024
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Promoted home loans
Variable Rate Home Loan LVR < 80%
Real Time Rating™
- 2024 Award Winner
- Special
- Owner Occupied
- Variable
Interest rate p.a.
5.99%
Comparison rate* p.a.
5.90%
Australian Credit Licence 234945
Fees & charges apply
Executive Saver Home Loan
Real Time Rating™
- Owner Occupied
- Variable
- 50% min deposit
- P&I
Interest rate p.a.
5.99%
Comparison rate* p.a.
6.04%
Australian Credit Licence 393283
Fees & charges apply
Base Variable Rate Home Loan
Real Time Rating™
- Investor
- Variable
- 10% min deposit
- P&I
Interest rate p.a.
7.36%
Comparison rate* p.a.
7.41%
Australian Credit Licence 230686
Fees & charges apply
Advantage Plus
Real Time Rating™
- Owner Occupied
- Variable
- 10% min deposit
- P&I
Interest rate p.a.
7.24%
Comparison rate* p.a.
7.55%
Australian Credit Licence 243099
Fees & charges apply
Product data updated on 28 Apr 2024