We spend a lot of time talking to borrowers about their home loans — and lately, the same conversations keep coming up. People are reviewing their repayments, questioning their rates, and asking whether they should be doing something about it.
There’s a clear pattern when that happens: borrowers stop being loyal and start looking around.
And in 2025, Australians didn’t just look — they moved. In many cases, they packed up their mortgage, compared a few rates, and quietly left their bank.
New lending indicators data (reported off ABS figures) shows 640,137 mortgages were refinanced across 2025, a 20% jump on the year before.
Even more telling? 64% of those refinancers didn’t just renegotiate — they switched lenders altogether. That’s not background noise. That’s half a million “thanks, but we’ll see what else is out there.”
In this week’s newsletter, we run through when refinancing is genuinely worth it — and the small traps that can turn a “sharp new rate” into an expensive lesson.
When you see 640,137 refinances in a single year, it’s tempting to think everyone has suddenly become a mortgage expert. The reality is simpler: the market is competitive, and borrowers are increasingly willing to test it.
There’s also a practical reason this trend keeps showing up. Even among variable loans, the gap between rates across the market can be meaningful — sometimes more than 2%. When that kind of spread exists, reviewing your mortgage stops being a “nice to have” and starts becoming a genuine money move.
But refinancing is one of those decisions where the headline looks clean, and the fine print does the damage.
When refinancing is actually worth it
Refinancing usually makes sense when you can tick at least one of these boxes:
- Your current rate or loan product is clearly uncompetitive for your risk profile
- The savings over the time you expect to hold the new loan comfortably exceed the switching costs
- You’re fixing a structural issue — for example, improving your offset setup, changing your loan split, or resetting things for the next few years
Before doing anything else, there’s also a simple first step many borrowers skip: ask your existing lender for a better deal. In a market like this, retention pricing is very real.
The common traps borrowers miss
Most refinance mistakes boil down to one of these:
 Break costs |  Equity and LMI surprises |
 Fees that sound small but add up |  Accidentally extending your loan term |
A quick example
Say you refinance a $600,000 loan and reduce your rate by 0.30%. Roughly speaking, that’s about $1,800 in interest savings in the first year. If your switching costs come in around $1,200 all-in, you’re likely ahead fairly quickly.
If they’re closer to $6,000 because a break fee bites or LMI reappears, it’s a very different conversation.
That’s why the real question isn’t “is the new rate lower?” — it’s “do I save overall, and how long does it take to recover the costs?”
The takeaway
Refinancing is a bit like cleaning out the garage. It’s annoying at the start, there’s more dust than you expected, and you’ll swear you’re never doing it again… until you find the money you didn’t realise you were leaving behind.
In a year where 640,137 Australians refinanced — and most switched lenders to do it — the message is pretty clear: your mortgage is allowed to be reviewed. Regularly.
Variable
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR.
1 Year Fixed
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR. At the end of the three year fixed period, the borrowers interest rate will revert to a standard variable rate for the life of the loan.
