Refinance Home Loans: Best Rates & Expert Guide

  • Compare refinance home loan rates from 5.48% p.a. (comparison rate^ 6.24% p.a.)
  • Get exclusive tips on refinancing from our home loans expert
Refinancing your home loan
Refinancing your home loan

In our refinance home loans guide:

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Best refinance home loan rates Australia (lowest variable rates)

Compare variable rate owner-occupier refinance home loans (principal & interest). Table is sorted by the lowest comparison rate, then lowest interest rate.

Summerland Bank - Eco Home Loan

Variable interest rate

From 5.84% p.a.

Comparison rate^

5.89% p.a.

Features
  • Repayment flexibility
  • Redraw facility
Maximum loan to value ratio (LVR)

80%

Northern Inland CU - Dream Home Loan

Variable interest rate

From 5.84% p.a.

Comparison rate^

6.00% p.a.

Features
  • Repayment flexibility
  • Redraw facility
Maximum loan to value ratio (LVR)

80%

Pacific Mortgage Group - Owner Occupied

Variable interest rate

From 5.89% p.a.

Comparison rate^

5.89% p.a.

Features
  • Extra repayments allowed
  • Redraw facility
Maximum loan to value ratio (LVR)

80%

Reduce Home Loans - Basic Owner Occupied

Variable interest rate

From 5.89% p.a.

Comparison rate^

5.91% p.a.

Features
  • Unlimited extra repayments
  • No annual or monthly fees
Maximum loan to value ratio (LVR)

80%

Hume Bank - LiteBlue Owner Occupied

Variable interest rate

From 5.94% p.a.

Comparison rate^

5.95% p.a.

Features
  • Extra repayments allowed
  • Redraw facility
Maximum loan to value ratio (LVR)

60%

Tiimely Home - Livein Owner Occupied

Variable interest rate

From 5.94% p.a.

Comparison rate^

5.95% p.a.

Features
  • Extra repayments allowed
  • Redraw facility
Maximum loan to value ratio (LVR)

90%

Community First Bank - Basic Home Loan

Variable interest rate

From 5.94% p.a.

Comparison rate^

5.99% p.a.

Features
  • Extra repayments allowed
  • Redraw facility
Maximum loan to value ratio (LVR)

95%

Summerland Bank - Eco Home Loan Special

Variable interest rate

From 5.94% p.a.

Comparison rate^

5.99% p.a.

Features
  • Extra repayments allowed
  • Redraw facility
Maximum loan to value ratio (LVR)

60-80%

Qudos Bank - No Frills Home Loan

Variable interest rate

From 6.04% p.a.

Comparison rate^

6.04% p.a.

Features
  • Extra repayments allowed
  • Redraw facility
Maximum loan to value ratio (LVR)

70%

Loans.com.au - Basic Home Loan

Variable interest rate

From 6.04% p.a.

Comparison rate^

6.06% p.a.

Features
  • Extra repayments allowed
  • Redraw facility
Maximum loan to value ratio (LVR)

90%

Variable interest rate Comparison rate^FeaturesMaximum loan to value ratio (LVR)

Summerland Bank - Eco Home Loan

From 5.84% p.a.

5.89% p.a.

  • Repayment flexibility
  • Redraw facility

80%

Northern Inland CU - Dream Home Loan

From 5.84% p.a.

6.00% p.a.

  • Repayment flexibility
  • Redraw facility

80%

Pacific Mortgage Group - Owner Occupied

From 5.89% p.a.

5.89% p.a.

  • Extra repayments allowed
  • Redraw facility

80%

Reduce Home Loans - Basic Owner Occupied

From 5.89% p.a.

5.91% p.a.

  • Unlimited extra repayments
  • No annual or monthly fees

80%

Hume Bank - LiteBlue Owner Occupied

From 5.94% p.a.

5.95% p.a.

  • Extra repayments allowed
  • Redraw facility

60%

Tiimely Home - Livein Owner Occupied

From 5.94% p.a.

5.95% p.a.

  • Extra repayments allowed
  • Redraw facility

90%

Community First Bank - Basic Home Loan

From 5.94% p.a.

5.99% p.a.

  • Extra repayments allowed
  • Redraw facility

95%

Summerland Bank - Eco Home Loan Special

From 5.94% p.a.

5.99% p.a.

  • Extra repayments allowed
  • Redraw facility

60-80%

Qudos Bank - No Frills Home Loan

From 6.04% p.a.

6.04% p.a.

  • Extra repayments allowed
  • Redraw facility

70%

Loans.com.au - Basic Home Loan

From 6.04% p.a.

6.06% p.a.

  • Extra repayments allowed
  • Redraw facility

90%

Rates are current as of 04 December 2023. ^Warning: Comparison rates are calculated based on a loan amount of $150,000 repaid over a 25-year term with monthly repayments. Different loan amounts and terms will result in different comparison rates. Check with the provider for full loan details, including rates, fees, eligibility and terms and conditions to make sure the product is right for you. While this is an extensive list of the lowest-rate refinance home loans in Australia, we can't guarantee that all loans available in the market are shown.

Best refinance home loan rates Australia (lowest fixed rates)

Compare fixed rate owner-occupier refinance home loans (principal & interest) sorted by the lowest interest rate, then the lowest comparison rate.

Australian Mutual Bank - Owner Occupied Fixed

Interest rate

From 5.48% p.a. for 3 years

Comparison rate^

6.24% p.a.

Features
  • No annual or monthly fee
Maximum loan to value ratio

95%

Australian Mutual Bank - Owner Occupied Fixed

Interest rate

From 5.63% p.a. for 5 years

Comparison rate^

6.16% p.a.

Features
  • No annual or monthly fee
Maximum loan to value ratio

95%

Illawarra Credit Union - The Works Package Home Loan Fixed

Interest rate

From 5.79% p.a. for 3 years

Comparison rate^

6.91% p.a.

Features
  • No annual credit card fee
  • Split loan option
Maximum loan to value ratio

95%

Arab Bank Australia - Owner Occupied Fixed

Interest rate

From 5.85% p.a. for 1 years

Comparison rate^

7.63% p.a.

Features
  • Flexible repayments
Maximum loan to value ratio

60-70%

BCU Bank - Owner Occupied Fixed

Interest rate

From 5.89% p.a. for 3 years

Comparison rate^

6.18% p.a.

Features
  • Additional payments up to $25,000
Maximum loan to value ratio

95%

Qudos Bank - Owner Occupied

Interest rate

From 5.94% p.a. for 3 years

Comparison rate^

6.23% p.a.

Features
  • Redraw facility
Maximum loan to value ratio

80%

Horizon Bank - Rate Home Loan Owner Occupied Fixed

Interest rate

From 5.94% p.a. for 3 years

Comparison rate^

6.42% p.a.

Features
  • Flexible repayments
  • Redraw facility
Maximum loan to value ratio

70%

BCU Bank - Owner Occupied Fixed

Interest rate

From 5.99% p.a. for 5 years

Comparison rate^

6.17% p.a.

Features
  • Additional repayments
  • Redraw facility
Maximum loan to value ratio

95%

IMB - Owner Occupied Fixed

Interest rate

From 5.99% p.a. for 3 years

Comparison rate^

6.32% p.a.

Features
  • Additional repayments
  • Redraw facility
Maximum loan to value ratio

80%

Heritage Bank - Home Advantage Fixed

Interest rate

From 5.99% p.a. for 5 years

Comparison rate^

6.42% p.a.

Features
  • Additional repayments
  • Redraw facility
Maximum loan to value ratio

95%

Interest rate Comparison rate^FeaturesMaximum loan to value ratio

Australian Mutual Bank - Owner Occupied Fixed

From 5.48% p.a. for 3 years

6.24% p.a.

  • No annual or monthly fee

95%

Australian Mutual Bank - Owner Occupied Fixed

From 5.63% p.a. for 5 years

6.16% p.a.

  • No annual or monthly fee

95%

Illawarra Credit Union - The Works Package Home Loan Fixed

From 5.79% p.a. for 3 years

6.91% p.a.

  • No annual credit card fee
  • Split loan option

95%

Arab Bank Australia - Owner Occupied Fixed

From 5.85% p.a. for 1 years

7.63% p.a.

  • Flexible repayments

60-70%

BCU Bank - Owner Occupied Fixed

From 5.89% p.a. for 3 years

6.18% p.a.

  • Additional payments up to $25,000

95%

Qudos Bank - Owner Occupied

From 5.94% p.a. for 3 years

6.23% p.a.

  • Redraw facility

80%

Horizon Bank - Rate Home Loan Owner Occupied Fixed

From 5.94% p.a. for 3 years

6.42% p.a.

  • Flexible repayments
  • Redraw facility

70%

BCU Bank - Owner Occupied Fixed

From 5.99% p.a. for 5 years

6.17% p.a.

  • Additional repayments
  • Redraw facility

95%

IMB - Owner Occupied Fixed

From 5.99% p.a. for 3 years

6.32% p.a.

  • Additional repayments
  • Redraw facility

80%

Heritage Bank - Home Advantage Fixed

From 5.99% p.a. for 5 years

6.42% p.a.

  • Additional repayments
  • Redraw facility

95%

Rates are current as of 04 December 2023. ^Warning: Comparison rates are calculated based on a loan amount of $150,000 repaid over a 25-year term with monthly repayments. Different loan amounts and terms will result in different comparison rates. Check with the provider for full loan details, including rates, fees, eligibility and terms and conditions to make sure the product is right for you. While this is an extensive list of the lowest-rate refinance home loans in Australia, we can't guarantee that all loans available in the market are shown.

Expert tip for finding the best refinance home loan

Mansour Soltani

“Don't be afraid of the smaller lenders as they can be the most innovative and competitive. The risk appetite of lenders and their offers change regularly – sometimes monthly – so it’s worth checking the market often to see what’s available. A mortgage broker can check all the lenders on their panel for you at once to see who can offer you the best deal.”

Mansour Soltani, Money.com.au's home loan expert

How does home loan refinancing work?

Refinancing a home loan means switching from your current loan to a new one, either with the same lender or a different provider. When you refinance, your current home loan is closed and the balance is moved across to the new loan for you to continue repaying it.

Ideally you’ll refinance to a home loan offering better terms (interest rate, fees, features), meaning your repayments could be lower with the new loan.

Alternatively, you may also be able refinance to a higher loan amount (if you need to borrow more), or move to a loan with a shorter term to save on interest.

In either of these cases, your repayments will likely be higher after the refinance.

“Borrowers should get into the habit of reviewing their home loan pricing every 12 months and refinancing every couple of years,” our home loans expert and mortgage broker, Mansour Soltani, says.

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According to the Australian Bureau of Statistics, Australians refinance around 60,000 home loans every month. About two-thirds of these are owner-occupier loans and the rest are loans for investment properties.

How much could you save by refinancing your home loan?

Existing home loanRefinance home loan

Remaining home loan balance

$600,000

$600,000

Interest rate

6.5%

5.5%

Minimum fortnightly repayment

$1,869

$1,700

Total interest saving over remaining loan term

n/a

$109,944

This is a simplified hypothetical example only and does not factor in refinancing costs (e.g. application fees) or the impact of features on overall costs.

Potential benefits of home loan refinancing

Interest and fees

Save on interest and fees

Debt consolidation loans

Borrow more if you need it

Lender loan assessment

Access better home loan features

Australian Lenders

Reorganise your finances based on your current needs

Possible downsides of refinancing

Consolidating debt

Break costs (on old loan)

Bank Statement Health

Applications fees (on new loan)

Australian Customer Support

Requires a full new application

Credit Score

Can impact your credit score in short term

Common refinancing misconception

Mansour Soltani

“A lot of people don't realise that refinancing a home loan involves an application, like the one you did when you purchased your home and got the loan originally. It's the same amount of work really. The only thing that's missing is a contract of sale for the property. But the upside of refinancing can massively outweigh the effort.” - Mansour Soltani, home loans expert.

Mansour Soltani, Money.com.au's home loan expert

Most common reasons to refinance a home loan

1

Get a better home loan deal

As an established borrower, lenders are eager for your business and may offer you better deals. This can mean lower interest rates and lower fees, better loan features and more flexibility.

2

Borrow more by releasing equity

If you’ve built up equity in your property, refinancing could allow you to borrow more against that equity for purposes like renovating, buying an investment property or investing in shares.

3

Lock in a shorter loan term

If you can afford higher repayments, refinancing to a shorter loan term will mean big interest savings.

4

Switch to a different loan type

You may decide it’s time to move to a fixed rate or from fixed to variable. Or from principal and interest repayments to interest only (or vice versa).

5

Fixed rate term is ending

If your fixed rate is coming to an end and you don’t want to be automatically rolled onto your lender’s standard variable rate, you’ll need to refinance.

6

Restructuring finances following divorce/separation

For example, you may need to refinance if one spouse or partner is buying out the other’s share in a home.

7

Consolidating debt

Refinancing your home loan could enable you to roll other debts into your mortgage (i.e. increase your home loan size). This would mean a potentially lower rate on those debts but likely over a longer loan term.

8

Fed up with your current lender

Some people simply refinance because they have had a poor experience with their current lender and want to vote with their feet.

How to switch home loans

How to get the best deal when refinancing a home loan (step-by-step guide)

The actual process of refinancing is very similar to taking out a first-home buyer home loan to buy a property initially. But here are some steps that could help you to get the best deal possible as w refinancer specifically.

1. Ask your current lender for a better deal first

“Particularly if it's a high loan amount, lenders want to hold that loan on their books, Mansour explains.

"So they'll typically come back with a better rate, and then we have a look at the market to see what’s available compared to that offer.

“The reality is, a lot of the time your current lender won’t match a lower rate from another provider. Because of how banks fund loans, new loans are typically cheaper to fund than existing loans. But what they might do is try to make the difference between their rate and the competitor’s so small that you decide refinancing isn’t worth it.”

Australia's Money Matchmaker matching you with your best loans across multiple lenders
If rate isn’t the deciding factor, it may come down to the loan features your current lender can offer versus what you can get elsewhere.

2. Maximise your property valuation

When you’re buying a property, the mantra is ‘location, location, location’. But when you’re refinancing your home loan, that changes to ‘valuation, valuation, valuation’.

As part of the refinancing process, a lender will have your property valued. Mansour says he compares multiple lenders for his clients based on the valuation they will offer on the property. He calls this ‘shopping the val’.

The aim is getting the highest valuation possible. That can mean you are eligible to refinance at a lower interest rate on account of your lower loan-to-value ratio, or you can borrow more against your equity (a higher property valuation equals higher equity for the owner).

According to Mansour, the lender offering the lowest rates can often be more conservative when valuing properties. Hence the need to shop around.

Tip: Don't read too much into online property valuations - the lender's valuation may be very different

Home loan refinance property valuation

3. Compare rates

Getting a lower interest rate on your home loan by refinancing will save you money. Sometimes a lot of money.

That’s assuming the other major aspects of the loan are the same. For example, if you refinance from a loan with principal and interest repayments to an interest-only loan, the interest rates available may be higher. The same goes if you're refinancing a variable rate home loan to a fixed rate.

Looking at the comparison rate will give you an idea of the overall cost of the loan per year, including interest and fees.

The trade off with some of the lowest rate loans is they tend to be available on more basic home loans that are light on features.

Speaking of which…

4. Get loan features that will make a difference

Refinancing to a loan with better features could also save you a lot of money. For example:

  • Offset account: An offset account is a transaction account where the balance reduces (offsets) the balance of your home loan that interest is charged on.
  • Flexibility to make extra repayments: Some loans limit this, others don’t.
  • Redraw: If you make extra repayments, a redraw facility allows you to withdraw that money again if you need it.
  • Cashback: Some lenders offer refinance cashback as a perk for switching your loan to them.

“I often recommend a redraw to clients for an owner occupier and an offset for an investment property. Redraws are generally free and act in a very similar way to an offset,” according to Mansour.

Read more about the differences between offset and redraw.

5. Negotiate on fees

If there are application fees for refinancing to a new lender, ask if these can be waived. In a lot of cases, they can be if the lender is keen to get the deal across the line or your broker has a strong relationship with the lender.

The home loan fees charged by your existing lender when you leave (discharge fees) are naturally harder to negotiate away.

6. Think about the loan term

Whatever you do, don’t let your loan term be inadvertently extended. Some lenders may default new customers (even those refinancing) onto a 30-year loan term. Ideally you want the same loan term, or even a shorter one if you can afford the higher repayments.

If you refinance to a lower rate, but keep your regular repayment at the same level as your old loan, your loan term should be shorter under the new loan.

7. And the long term

While understandably you may be primarily motivated by getting the best deal you can right now, remember you are still signing up for a loan that may take decades to repay.

As well as getting the best refinance deal for now, consider:

  • If you’re refinancing to a fixed rate, how competitive is the revert rate that will apply when the fixed term ends?
  • Is the lender known for being competitive generally? Or does it just happen to have a super cheap loan offer available currently to sign up customers? A mortgage broker can be useful for letting you know which lenders are best at regularly repricing their borrowers’ loans to a better rate over time.

Am I eligible to refinance my home loan?

Just because you were initially eligible for a home loan, it doesn’t mean you will automatically be approved to refinance. A new lender will still assess your home loan application thoroughly.

If your circumstances have changed (your income, other debts, credit score etc.), that will be taken into account. That said, having a record of consistently repaying your previous home loan will likely count in your favour.

For example, some borrowers who originally had to take out a bad credit home loan or a low doc home loan later refinance to a better rate once their credit has improved.

The valuation of your property matters a lot here too. If your property has dropped in value since you took out your loan initially, refinancing may be more difficult unless you have paid off a big chunk of the loan in the meantime.

In other words, your loan-to-value ratio will need to be below 80%, or you may need to pay for lender’s mortgage insurance (even if you also had to pay for it with your previous lender).

“The best thing you can do in the scenario is ask for a pricing review with your current lender, just don’t be surprised if the lender doesn’t ultimately offer you a discount,” Mansour explains.

Australia's Money Matchmaker matching you with your best loans across multiple lenders
If you’re concerned about your eligibility to refinance, using a mortgage broker could be worthwhile as they have specialist knowledge of lenders’ policies and ‘serviceability buffers’ (the difference between your actual minimum repayment and the higher amount the lender will use to assess whether you could still afford the loan if rates increase.).

More home loan refinance FAQs

You can usually apply for a refinance home loan online in a matter of minutes, but realistically it can take several weeks for the entire process from start to finish.

There’s no actual upper limit on how often you can refinance, but there are refinancing costs to consider and generally you’ll need to be on any particular loan for a while in order for the savings to offset the costs.

Remember too that refinancing involves a new application and credit enquiry that goes on your credit report. Refinancing very frequently could become a red flag for future lenders. Plus, what lender is going to want to sign up a borrower who is very unlikely to hang around for long?

If you can get a better or more suitable home loan deal by switching your loan, that is generally a good time to be considering a refinance. But here are some other common refinancing ‘triggers’:

  • You have been consistently paying off your current loan for at least 12-24 months and want to ensure you’re still on the best deal possible.
  • Your home interest rate has recently increased and is no longer competitive relative to other loans available.
  • Your fixed rate term is ending soon and you want to be proactive about what happens next (i.e. not just automatically being moved onto your lender’s standard variable rate which is typically what happens by default).
  • Your home has had an uplift in value, meaning your loan-to-value ratio is lower (in other words, less risky for lenders) and you may be eligible for a better rate as a result.
  • You have built up equity in your home and want to use that to borrow more – for example, to buy an investment property or invest in shares. Consider getting financial advice from a qualified advisor before doing this.
  • Your personal circumstances have changed and your current loan is no longer suitable. Divorce/separation is a common reason.
  • You had bad credit when you took out your initial loan but your situation has improved – you may be eligible to refinance with a wider selection of lenders.

You can generally fix your home loan for a period of one to five years. Compare interest rates on fixed rate home loans:

Home Loans guides and resources

What's the next step on your property journey? Our home loan guides will help you navigate the road ahead, whether you're buying, building or looking to save on an existing loan.

Written by

Sean Callery Editor Money.com.au

Editor

Sean Callery

Reviewed by

Mansour Soltani home loan expert

Home Loans Expert

Mansour Soltani

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