Refinance home loan rates December 2024

What does it mean to refinance a home loan?

Refinancing means switching from your current home loan to a new one. Borrowers refinance their home loans to:

• Get a lower interest rate
• Borrow more money
• Switch to a loan that suits their current financial goals

According to Finder's Housing Market Report, Australians refinanced in record numbers in 2023. 72% of home loan refinancers switched lenders in search of a better deal, while the remainder refinanced with their current lender.

Our best refinance home loan for December 2024

Unloan Variable Home Loan - (Owner Occupier)

Unloan Variable Home Loan

• $0 Application
• $0 Annual Fee
• 5.99% Interest rate
• 5.9% Comparison rate

Read review

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Pros & cons

• A competitive variable rate home loan
• Automatic interest rate discount
• No lender fees

• No offset account
• You can’t borrow more than 80% of the property value, even with a first home buyer scheme
• Unloan doesn’t offer fixed rates or interest only loans

How to compare home loans when refinancing

The table above features a wide selection of home loans suitable for different types of borrower, including homeowners and investors.

To find a better loan:

1. Enter your current loan amount and interest rate in the fields above the table (or just estimates if you're not sure).
2. Compare loans by sorting from highest to lowest interest rate or by looking at the amount you can save with each loan (if the rate is lower than your current loan).
3. Click the green button on any loan in the table if you think it suits your needs and submit an enquiry. It only takes a minute.

More ways to find a better home loan

Comparing for yourself and switching is easy. But if you want someone to do the hard work for you, you're in luck!

Every month Finder picks our top home loans for the month by looking at loans with the lowest rate and fees.

And you can check out the full list of Finder's 2024 Home Loan Award winners if you want to find loans that had consistently low rates and fees all year.

How much does refinancing cost?

Generally, you can expect to spend around $1,000 when refinancing your home loan. Note that most of these fees and charges will be added to your loan, rather than you having to pay for them as upfront costs. In many cases, the amount of money you'll save when refinancing to a cheaper rate will more than outweigh the costs of refinancing.

• Discharge fees. Lenders often charge a fee to end a home loan of around $125 to $250 - they're also known as settlement fees.
• Government fees. Refinancers may have to pay state government fees to de-register their old loan and register the new one.
• Loan fees. Some lenders charge application or settlement fees ranging from $250–$600 or charge ongoing fees.
• Fixed rate break costs. You may have to pay an exit fee for breaking the loan when refinancing a fixed rate loan. Ask your current lender for a break fee estimate before committing to refinancing.

Here's a quick example of switching costs in a hypothetical refinance scenario (using government fees from Victoria):

What are the benefits of refinancing?

• You can get a lower interest rate: The most common reason to refinance is to get a better interest rate on your home loan than your current lender offers. Easy.
• You could increase your loan amount: maybe you want to use your equity to increase your loan amount but your existing lender has turned you down. Refinancing could allow you to borrow more (hopefully for something sensible like a home renovation and not to work on your sweet tan in Bali).
• You could access new features: If your existing loan doesn't offer things like an offset account or redraw, it's definitely reasonable to want to refinance so you can get them.
• You can lessen your loan term: If you're in a position to do so, you could shorten the length of your loan term if you refinance. Your monthly repayments will go up, but you'll pay the loan off much faster and will save thousands on interest. (But remember: if you're on a variable loan it might be that you can make unlimited extra repayments and pay off the loan early anyway.)

What are the disadvantages of refinancing your home loan?

• Paying extra fees: Refinancing comes with a cost. For instance, you might have to pay a settlement fee when you leave your lender: if you're in a fixed rate period it's likely you'll need to pay a break fee. You may also need to pay an application fee at the new lender.
• Paying more overall: This is where the math gets complicated. Let's say you were 10 years into a 30 year loan term. Refinancing your remaining loan value to another 30 year loan could mean you end up paying more over the life of the loan. Confused? Take a look below at our more detailed explainer.
• Lenders Mortgage Insurance: If you're still fairly early into your loan term, you may not have built up a whole heap of equity. So, you may need to pay more in LMI. Which could be really annoying if you already paid it the first time.
• Losing equity: Talking of equity... refinancing to access more cash means you'll probably lose some of the equity you've built in your home. It might be a worthwhile risk to take, but you'll need to assess

How much can you save by refinancing in 2024?

We estimate that the average person could save up to $6,996 a year by switching to a lower rate:

• The average Australian home loan is now $641,143 (according to the ABS) - a record high!
• The average variable interest rate loan in Finder's database is 7.08%. The lowest available variable rate on the market is 5.69%.
• Assuming a 30-year loan term, if you switched to that lower rate your monthly repayments would drop from $4,301 to $3,718. That's a saving of $583 every month, or $6,996 a year.

Data is correct as of 02 December 2024. This savings example is a hypothetical estimate only. The lowest rate is for an owner-occupier loan with 80% LVR and may not be the lowest rate across the entire market.

Market update by Rebecca Pike – Finder's senior home loans writer

How to find the best refinance rate

To get the best home loan refinance rate, take the following steps:

Look for a cheaper rate

The lower the interest rate the more money you save. This is true for every borrower and it's the first thing most refinancers look for.

Even just a small difference in rates can end up saving you hundreds of dollars a year in repayments.

Make sure the loan meets your needs

You also need to refinance to a home loan that suits your needs. If you need a loan with an offset account, you want to avoid a basic loan that doesn't have this feature.

A package loan might look attractive, but it might have high annual fees and products you don't need.

Avoid a loan with high fees

There are usually 1 or 2 fees with any new home loan. But the cost of fees can vary widely, from practically nothing to hundreds of dollars. It's worth keeping loan fees in mind when preparing to refinance a home loan.

Our expert says

"Most Australians refinance to a new lender. But it is often worth asking your current lender for a lower rate first. If your current lender can't offer you better then it's time to shop around. And don't just look at the big banks you're already familiar with. Look at rates from online lenders, credit unions and smaller banks."

Graham Cooke

Head of consumer research

Learn more about calculating your refinancing costs

How to refinance a home loan in 5 steps

Refinancing means switching your current home loan to a new one.

And switching is easier than you think:

1. Check your current interest rate. Look at competitive mortgage rates and see if yours is too high. You could ask your lender to lower your rate or you could start looking for a better deal.
2. Compare home loan refinancing options. If you do decide to switch lenders, look for a suitable loan with a better rate and features you need.
3. Crunch the numbers. Work out the costs of your new loan, including application and ongoing fees, and make sure the new loan really is a better deal. Check the exit costs from your current loan too (there may be a discharge fee or break costs).
4. Apply for the new home loan. Collect your mortgage documents, submit your application and then wait for approval from the new lender. This can take a few hours to compile, but it's a worthwhile investment considering the potential savings.
5. Exit your current loan. When you refinance, your new bank will notify your current lender and you can discharge your mortgage.

Refinancing is quite a straightforward process, although it requires quite a bit of paperwork to submit a loan application. If your situation is complicated or unusual, you may want expert refinancing guidance, so you could reach out to a mortgage broker.

Read our detailed, step-by-step refinance guide

"I've only had my home loan for a few years, and it's one of the lowest rates on the market. So I probably won't need to refinance for a while. But I still watch my home loan like a hawk. Because every now and then my lender lifts rates (usually in response to the Reserve Bank's rate decisions). But this lender also offers slightly cheaper deals for new customers. Over time my rate ends up being much higher. So I call my lender and ask for its lowest rate. And I always get it. If my lender refused, I'd refinance in a heartbeat."

Richard Whitten

Editor

Why you can trust Finder's home loan experts

Easy answers, without any calls. We know fixing is a big deal, but checking you're options and rates shouldn't have to be. We speak to home owners every month, and have put over 50 hours in creating this guide.

Rates obsessed. We track big banks, small banks, credit unions and digital banks because whether you're fixing up for 1 year or 3, even 1 decimal place could save you big bucks (without getting annoying calls!).

Ready in any market .Lending rates verified from 180+ products day and night. Whether you're buying for the first time, or remembered refinacing at 3am - our rates are up-to-date.

Your home loan refinance questions answered

• When should you not refinance?

  There are some rare situations where refinancing could cost you more than you could save by switching:

  • Your fixed rate break costs are too high. If the cost of breaking a fixed rate loan is too high, then refinancing may not be worth it.
  • Your equity is below 20% of the property's value. If you own less than 20% of the property at its current value, then you will have to pay lenders mortgage insurance (LMI) when you refinance. Even if you paid it for your original loan.
  • Your loan amount is small or you're selling soon. If you don't have much left to repay on your home loan, then the savings from refinancing might not be worth the hassle. If you're planning on selling within the next 6 months, then the effort and cost involved in refinancing could also cancel out any financial rewards.

• Can I refinance a fixed rate loan?

  You can refinance a fixed rate home loan, but you have to pay a break fee for exiting the loan early during the fixed period. If you are close to the end of the fixed period on your loan, then this fee will be smaller, but if you have a few years left, it could cost thousands. Your current lender can provide you with a break cost estimate to help you decide if the cost is worth it.

• How much equity do you need to refinance?

  Theoretically, you can refinance your loan no matter how much or how little equity you have. But if your equity is under 20% of your remaining loan amount, then refinancing, while possible, gets expensive. This is because your new lender will charge LMI if your equity is below 20%.

• Should I refinance to a new 30-year loan?

  Most refinancers switch from a 30-year home loan to another 30-year loan. Even if they're many years into their original loan. That's fine and will keep your monthly repayments low. But you could save more money in the long run by switching to a shorter loan term.

  If you refinance 5 years into a 30-year loan term, you could switch to a 25-year loan. You'd pay more each month but end the loan at the same time as your original loan started.

  It's really a question of what works better for you. Do you want lower monthly repayments but a longer loan term (and more interest overall)? Or do you want to get a lower rate and pay the loan off faster with a shorter term?

  You can also stick to a new 30-year loan term but make extra repayments or build up offset savings. This has the same effect but gives you more options.

• How long does it take to refinance?

  It can take 2–4 weeks to get your new loan application approved and the old loan discharged. But it varies widely and depends on your new lender and your old one.

  Many online lenders (and even some of the banks) now offer fast digital applications. And it's usually easier for refinancers to get loans approved because they have built up equity and have a track record (hopefully!) of making regular loan repayments.

• What is the current refinance rate?

  Every lender sets its own interest rates for home loans. There's no one refinance rate. In fact, most lenders don't even have specific loans with rates just for refinancers (most loans are available to both new borrowers and people refinancing existing loans).

  Right now interest rates for owner-occupiers are as low as 5.49%.

• Do I need to refinance when getting divorced?

  When couples get divorced, there are hard decisions to make around property. You may decide to sell the home and share the profits or let one person keep it.

  If one person decides to buy out the other person's half, you will need to refinance the mortgage when transferring the property title. Otherwise, the person selling would still be on the mortgage.

  You can also decide to keep the home loan as it is and continue to make repayments.

  It's always better if a divorcing couple can agree amicably on what to do with their property. But it's still a really good idea to get legal advice.

• How often should I refinance?

  You can refinance as often as you like, but given the time involved and the cost of registering a mortgage, it doesn't make sense to switch frequently. You're better off finding a good deal that will hopefully remain a good deal for a few years. If your rate creeps up and you find better options, then it's time to ask your lender for a discount. And if that doesn't work, then you should switch.

• Can I refinance my home loan with the same bank?

  Yes. You can switch to a better loan with your current lender. Or you may be converting a property from your residence into an investment property. In this case you'd need to refinance your home loan to an investment loan.

• Finder's loan comparison disclaimer

  *The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal and reviewed by James Millard, a member of Finder's Editorial Review Board.

Written by

Richard Whitten

Editor

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

Richard's expertise

Richard has written 562 Finder guides across topics including:

• Home loans
• Property
• Personal finance
• Money-saving tips