Refinancing Home Loans

Thinking of refinancing? The table below features refinancing home loan products with some of the sharpest rates available on the market (reviewed monthly, from April 2019 onwards) from the big four banks, the top 10 customer-owned institutions and the larger non-banks.

The products have been selected by the Savings.com.au team to match a base criteria of: a $400,000 loan amount, variable, owner-occupier (OO), principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 90%.

Package or introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.

Company Loan product Advertised rate Comparison rate Repayments
Essentials Owner Occupied P&I 3.64% 3.66% $1,827 Go to site
Budget Owner Occupied Special 3.69% 3.72% $1,839 Go to site
Real Deal P&I Special Offer 90% $150k+ 3.72% 3.76% $1,846 Go to site
Great Rate Discount Variable $150k+ 3.72% 3.73% $1,846 Go to site
Achieve Variable Owner Occupied P&I 3.75% 3.80% $1,852 Go to site
Discount Variable $150k+ 90% 3.77% 3.79% $1,857 Go to site
Low Rate Home Loan with Offset P&I 90% 3.88% 3.89% $1,882 Go to site
Extra P&I 90% 3.89% 3.90% $1,884 Go to site
Base Variable Rate P&I Special Offer >80% 3.99% 4.03% $1,907 Go to site
P&N Bank & Home Loan and Bag 3.99% 3.99% $1,907 Go to site
Total Home Loan Variable $50k+ 4.05% 4.44% $1,921 Go to site
Simplicity Plus P&I >80% Special Offer 4.15% 4.19% $1,944 Go to site
Basic Variable P&I 95% 4.72% 4.77% $2,079 Go to site
Pepper Money Essential Full Doc Home Loan LVR >85% up to 90% 4.79% 5.18% $2,192 Go to site
Premium >80% 4.82% 4.86% $2,104 Go to site
Flexi Choice 5.16% 5.21% $2,187 Go to site
Liberty Sharp 80-95% LVR 5.34% 5.42% $2,321 Go to site
Rocket Repay Home Loan P&I 5.38% 5.52% $2,241 Go to site
Advertised
rate
Comp rate Repayments  
Essentials Owner Occupied P&I
3.64% 3.66% $1,827
Budget Owner Occupied Special
3.69% 3.72% $1,839
Real Deal P&I Special Offer 90% $150k+
3.72% 3.76% $1,846
Great Rate Discount Variable $150k+
3.72% 3.73% $1,846
Achieve Variable Owner Occupied P&I
3.75% 3.80% $1,852
Discount Variable $150k+ 90%
3.77% 3.79% $1,857
Low Rate Home Loan with Offset P&I 90%
3.88% 3.89% $1,882
Extra P&I 90%
3.89% 3.90% $1,884
Base Variable Rate P&I Special Offer >80%
3.99% 4.03% $1,907
P&N Bank & Home Loan and Bag
3.99% 3.99% $1,907
Total Home Loan Variable $50k+
4.05% 4.44% $1,921
Simplicity Plus P&I >80% Special Offer
4.15% 4.19% $1,944
Basic Variable P&I 95%
4.72% 4.77% $2,079
Pepper Money Essential Full Doc Home Loan LVR >85% up to 90%
4.79% 5.18% $2,192
Premium > 80%
4.82% 4.86% $2,104
Flexi Choice
5.16% 5.21% $2,187
Liberty Sharp 80-95% LVR
5.34% 5.42% $2,321
Rocket Repay Home Loan P&I
5.38% 5.52% $2,241

*Rates correct as at 2nd April 2019. View disclaimer.

About refinancing home loans

If you’re one of many Australians that feel like they’re getting a raw deal on your home loan, you have the power as a borrower to do something about it. By refinancing your home loan to a new loan with a lower interest rate or better features, you could save yourself thousands of dollars over the course of your loan period.

What is refinancing?

Switching home loans used to be a bonafide nightmare. Prior to 2011, lenders could charge exorbitant exit fees for customers who switched within a specified period, which discouraged people from refinancing despite being unhappy with their current loan. Fortunately, the Federal Government outlawed exit fees after that (except for loans written before 2011), making refinancing much easier.

There are a range of reasons for refinancing your home loan:

  • You might want a better interest rate
  • You’re sick of paying too much in ongoing fees
  • You might want to switch between variable and fixed rates
  • You want to access the equity in your home
  • You want to access more beneficial features (such as offset accounts)

Whatever your reason, the process of switching loans or lenders is called refinancing.

There technically isn’t such a thing as a ‘refinancing home loan’. They are just home loans that you switch to. These loans don’t have to be from another provider – you can refinance your home loan to a different loan product with your existing lender too.

When refinancing, you don’t have to take on any extra debt – you can simply refinance the amount left to repay (the ‘principal’). For example, let’s say you’re five years into a $500,000 home loan, with $100,000 repaid so far. If you wanted to refinance to a more suitable loan that had, say, a 15-year loan term, an offset account and a lower mortgage rate, then you would only have to refinance the remaining $400,000.

Some Australians do take on extra debt when refinancing as a way of borrowing more money (e.g. to pay for renovations, a deposit on a second house etc.), which they do by utilising the equity they’ve built up in their house.

This is a question only you can really answer, as your living situation will be unique to everyone else’s. We can’t read your mind through the screen, as useful as that would be.

BUT, refinancing may be a good idea if you think you’re paying too much in interest on your home loan. You don’t have to quite be at mortgage stress levels (mortgage repayments making up 30% of your take-home pay) to be unhappy with your home loan, and keep in mind that even a slight reduction in interest rates, fees and features can make a noticeable difference to your budget.

However, it might NOT be worth refinancing if you:

  • Have only just taken out the loan
  • Have a loan with high refinancing costs
  • Don’t have much time remaining on your loan term
  • Your remaining principal is small

Essentially, if the costs of refinancing outweigh the potential savings or other benefits, it’s probably not worth it.

Luckily for you, you now live in a world where switching home loans with certain providers can be done almost entirely online and in a timely manner. You’d be hard pressed to find someone who actually enjoys the process of looking at their home loan and applying, it’s a pain!

If you’ve crunched those numbers and are ready to make the switch, have your documents ready, such as payslips, loan statements, your ID and anything else you might need.

If a few years down the track after refinancing you think you can get an even better deal, you might consider refinancing again! When it comes to home loans, lenders need to earn your loyalty.

Looking for info on a specific type of home loan?

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*The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in 2018. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) have more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

Comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure. The interest rate per annum is based on a loan credit of $150,000 and a loan term of 25 years.