How Much Can You Really Save by Refinancing?
Not quite sure what refinancing is all about? You’re not alone. Let’s break it down quickly and see just how much you could save.
Ever since interest rates started climbing in May 2022, refinancing has been on the rise, with around 28,000 homeowners switching loans every month.
But here’s the thing—a lot of Australians are still missing out on potential savings simply because they’re unsure about how refinancing works.
A Finder survey found that one in five people have no idea what refinancing is, while 63% say they’re only “slightly confident” in their knowledge.
So, let’s clear things up and see how refinancing could put more money back in your pocket and ease some financial pressure.
What Is Refinancing?
Refinancing is simply replacing your old mortgage with a new loan—usually from a new lender.
The process is pretty straightforward:
Choose a loan that better suits your needs
Submit a formal application with proof of income, expenses, and ID
If approved, your new lender pays out your old loan, and you start making repayments to them instead
It’s often quicker and easier than most people expect—the whole process typically takes about four weeks from start to finish.
Refinancing: A Stress Buster
Yes, refinancing can help you tap into home equity, unlock better loan features, or consolidate debts.
But the #1 reason people refinance? To save money by getting a lower interest rate.
And those savings can seriously reduce financial stress. Finder found that 60% of refinancers were stressed about their home loan before making the switch. If that’s you, refinancing could be a game-changer.
How Much Could You Save?
Short answer: potentially a lot!
Lenders are still offering better deals to new customers than to existing ones. Here’s what that looks like:
The average rate on existing home loans is around 6.20%
Meanwhile, new customers are scoring rates as low as 5.99%
That’s a 0.21% difference—or almost the equivalent of reversing one official rate hike!
What does that mean in real terms?
The average refinanced loan is $526,093
A 0.21% rate cut could save you over $70 per month
That adds up to $840 in the first year alone (based on a 30-year loan term)
Is Refinancing Right for You?
Feeling the squeeze with rising interest rates? Let’s chat!
We can help you figure out if refinancing is the right move for you and exactly how much you could save by switching lenders. Get in touch today!
Disclaimer: This article provides general information and should not be considered financial or tax advice. It does not take into account your personal circumstances. Always seek professional advice before making financial decisions. This content is protected by copyright laws and cannot be modified, reproduced, or republished without prior written consent.
