Refinancing Hits 4-Year High - Could You Save?

Australians are refinancing their home loans in record numbers. In the year to September 2025, over 618,000 loans were refinanced - a four-year high. That's more than the 537,000 new home loans written in the same period. If you haven't reviewed your home loan recently, you could be leaving thousands of dollars on the table.

Why Are So Many People Refinancing?

The surge in refinancing activity is driven by several factors:

• Rate competition - Lenders are competing fiercely for business, offering sharp rates to attract new customers
• Loyalty tax - Many existing customers are paying higher rates than new customers at the same bank
• Rate cuts in 2025 - The RBA cut rates three times in 2025, prompting many to review their loans
• Digital convenience - Refinancing has become faster and easier than ever

How Much Could You Save?

The potential savings from refinancing can be substantial. Here's the current market snapshot:

For the average Australian home loan of $693,802, switching from the average rate to the lowest available rate could save:

Signs You Should Consider Refinancing

Not everyone should refinance, but here are key indicators that it might be right for you:

1. You Haven't Reviewed Your Loan in 2+ Years

If you've been with the same lender for more than two years without negotiating, you're likely paying more than you need to. Lenders often reserve their best rates for new customers.

2. Your Fixed Rate is Ending

If your fixed rate period is coming to an end, you'll likely revert to a higher variable rate. This is an ideal time to shop around.

3. Your Financial Situation Has Changed

If your income has increased, your property value has grown, or you've paid down significant debt, you may qualify for better rates than when you first got your loan.

4. You Want Different Loan Features

Perhaps you want an offset account, a redraw facility, or the ability to make extra repayments. Refinancing lets you choose a loan that better fits your needs.

5. You Want to Access Equity

If your property has increased in value, refinancing can allow you to access that equity for renovations, investments, or other purposes.

What Does Refinancing Cost?

While refinancing can save you money, there are costs to consider:

Many lenders offer cashback incentives of $2,000 - $4,000 to offset these costs, meaning refinancing can effectively cost you nothing - or even put money in your pocket.

The Refinancing Process

Refinancing is simpler than getting your first home loan. Here's how it works:

1. Review your current loan - Know your current rate, balance, and any exit fees
2. Compare options - Work with a broker to find the best deals
3. Apply for the new loan - Submit your application with income and asset documentation
4. Property valuation - The new lender will value your property
5. Loan approval - Once approved, settlement is arranged
6. Settlement - Your new lender pays out the old loan and you start fresh

The entire process typically takes 2-4 weeks.

Should You Refinance Now or Wait?

With some economists predicting rate rises in early 2026, the current competitive lending environment may not last forever. Fixed rates have already started to rise as lenders price in future RBA moves.

If you're considering refinancing, acting sooner rather than later could lock in better rates before they increase.

How We Can Help

At JMD Mortgages, we have access to over 50 lenders. We can:

• Compare your current rate against the market
• Calculate your potential savings
• Handle the entire refinancing process for you
• Negotiate with lenders on your behalf
• Ensure you don't pay more than necessary in switching costs