RateCity.com.au
  1. Home
  2. Home Loans
  3. News
  4. No RBA cut but home-owners can save three times more by refinancing

No RBA cut but home-owners can save three times more by refinancing

Liz Seatter avatar
Liz Seatter
- 4 min read
No RBA cut but home-owners can save three times more by refinancing

The Reserve Bank has left the cash rate on hold today at 0.25 per cent but has left the door open to a future cut.

While home-owners won’t be getting an RBA cut from their bank this month, they can still save thousands by refinancing.

New figures released by the RBA today show the average existing mortgage holder had a home loan rate of 3.19 per cent in August, yet new owner-occupier customers were offered, on average, a rate of just 2.69 per cent.

Average RBA home loans rates compared to lowest rate loans

Average rate - existing customersAverage rate - new customersLowest variable – new customers
Owner-occupied; All loans

3.19%

2.69%

1.89%

Investment; All loans

3.55%

3.03%

2.49%

Source: RateCity.com.au.Average RBA rates are from Housing Lending data 31.08.2020, released 6.10.2020. Lowest rates are from RateCity.com.au database. LVR restrictions apply for some rates.

RateCity.com.au database

  • Lowest variable rate is 1.89%
  • Lowest big four bank variable rate is 2.19% (Westpac, intro rate for 2 years, reverts to 2.69%)
  • 87 lenders have at least one fixed or variable rate below 2.50%
  • 12 lenders have at least one fixed or variable rate below 2%

RateCity.com.au analysis shows the average owner-occupier would pay $33 less a month with a 0.15 per cent rate cut, but if they refinanced to the RBA average new customer rate their monthly repayments could drop three times as much.

RateMonthly repaymentsDifference
Existing customer rate3.19%$1,728

$0

Potential rate if RBA cut by 0.15%3.04%$1,695

$33

New customer rate2.69%$1,620

$107

Notes: Based on a $400,000 loan over 30 years paying principal and interest. Note refinancers may have shorter loan terms.

RateCity.com.au research director, Sally Tindall, said mortgage holders don’t need to wait around for the RBA to save money.

“While home-owners didn’t get any reprieve from the RBA this month, they can still make significant savings by shopping around.

“If you’re fortunate enough to still have your regular income and a decent amount of equity in your home, you’re in prime position to capitalise on the refinancing boom.

“According to RBA data, the average existing home loan customer is on a rate that’s half a percent higher than a new customer.

“For households currently facing financial hardship due to COVID, don’t be afraid to call your bank and ask for a better deal. The banks have been instructed by ASIC to do everything they can to help struggling customers.

“Find out what rate your bank is offering new customers and use this to help you haggle.

“If the RBA cuts rates by 0.15 per cent in the coming months, the spotlight will be on the banks to see if they pass it on in full to their loyal customers,” she said.

Lowest owner-occupier rates on RateCity.com.au

LenderAdvertised rate
VariableReduce Home Loans

1.89%

1-year fixedReduce Home Loans

1.90%

2-year fixedCommunity First Credit Union/ Illawarra Credit Union

1.99%

3-year fixedBank First

1.99%

5-year fixedVirgin Money

2.49%

Source: RateCity.com.au. Home loans above are available Australia-wide. LVR restriction may apply.

Big Four Bank lowest rates

LenderAdvertised variableAdvertised

2-yr fixed

Advertised

3-yr fixed

CBA

2.69%

2.29%

2.29%

Westpac

2.19% for 2 years then 2.69%

2.19%

2.19%

NAB

2.69%

2.19%

2.29%

ANZ

2.72%

2.29%

2.29%

Source: RateCity.com.au.Note: Rates are for owner occupiers paying principal and interest. Westpac’s rates are for customers with a loan-to-value ratio of less than 70 per cent

Disclaimer

This article is over two years old, last updated on October 6, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

Compare home loans in Australia

Product database updated 30 Mar, 2024

This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

Share this page

LinkedInTwitterFacebookMail

Get updates on the latest financial news and products

By continuing, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.

Related home loans articles