What to consider when refinancing your home loan

Following the RBA’s third official cash rate cut this year, it’s no surprise many Australians are re-evaluating their home loan arrangements.

“While a lower rate is a great incentive, it’s not the only factor to consider when refinancing."

With home loan rate reductions becoming a reality in early 2025, ANZ saw a steady rise in refinancing activity with volumes increasing around 20-30% versus this time last year. With lower interest rates, we have forecast that this elevated refinance activity will continue.

While a lower rate is a great incentive, it’s not the only factor to consider when refinancing. Other factors to look into include:  

• Loan features: Some customers may want an offset account, the ability to redraw or flexible repayment options. 
• Fees and costs: Additional charges like break costs, application fees, or valuation charges should be considered alongside the interest rate. 
• Financial goals: Customers come to us at all stages of their lives and finances, while some will be looking to consolidate debt, others may want to shorten the term of their loan. 
• Market outlook: It’s helpful to understand what analysts are predicting for future rate increases or decreases. 

One of the most common questions mortgage brokers and our lenders hear is: “Should I go with a fixed or variable rate?”.

The answer isn’t always straight forward. It depends on your personal circumstances, risk appetite, and financial goals. Choosing the right home loan structure, whether fixed, variable, or a combination of both, can have a big impact on your financial flexibility and long-term goals, which is why we’d always recommend speaking with your lender or broker to find out what works best for you. 

To help you get started, here’s a breakdown of some of the key differences to think about before you start the conversation: