- Homeowner refinancing surged last year, with many switching to different lenders, signalling a shift away from traditional bank loyalty.
- The boom is driven by competitive rates, financial optimisation, and greater consumer mobility, pushing banks to innovate and offer incentives.
Speaking on the Savings Tip Jar podcast on Wednesday, Australian Banking Association CEO Simon Birmingham said Australia has a "really competitive environment", with several factors driving Australians to refinance in droves.
"We do see, particularly with younger generations of consumers, not so much of that traditional absolute loyalty to the stick-with-one-bank-for-life approach, so they're willing to shop around," Mr Birmingham said.
"On the bank side, we're seeing many different approaches to connecting with customers offering different products.
"That has seen some close to 700,000 people refinance their mortgages, up 20% from the previous year, and most of those, nearly two thirds of them refinancing to a new lender, which really shows that Australians are shopping around and trying to find the deal that best suits them in their circumstances."
According to ABS data, 640,137 home loans were renegotiated or switched in 2025, representing a 20% increase from the previous year.
Nearly two-thirds of homeowners who refinanced switched to a different lender, signalling that borrowers are increasingly shopping around rather than relying on existing banks to pass on rate cuts.
Even after three interest rate cuts last year, which could have automatically lowered repayments for many borrowers, many Australians chose to renegotiate or move their mortgages to secure the best deal.
Refinancing boom puts pressure on lenders
The refinancing surge is putting pressure on lenders, particularly the big four banks, which still control roughly 80% of Australia’s mortgage market.
Rising borrower mobility, along with broker-driven lending, is forcing banks to innovate and offer more competitive products.
“The growth in mortgage broker lending means that more choices are more easily available to people, but banks have responded and are trying to win back some of that broker market,” Mr Birmingham said.
"Sometimes it will pay to speak direct to some banks to be able to get the best possible deal."
Banks are responding with direct-channel incentives, exclusive rates, and special offers to retain customers.
“Australians are shopping around and trying to find the deal that best suits them and their circumstances," Mr Birmingham said.
“As consumers move, so too will the industry in that fierce competition to be able to bank your dollars,” he said.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
