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1,000 mortgages a day switching banks on back of rate cuts
14 Aug 2025
Almost 100,000 mortgages switched to a different lender in the June 2025 quarter – the highest level since September 2023 – data from the ABS shows.
This equates to an estimated 1,084 refinanced loans each day.
The uptick in refinancing, recorded by the ABS Lending Indicator data, released yesterday for the June quarter, comes on the back of rate cuts in February and May, which are likely to have encouraged borrowers to do a health check on their mortgage.
An astonishing 1.26 million mortgages have refinanced since the start of the hikes in May 2022, in seasonally adjusted terms. However, this includes some borrowers that have potentially refinanced more than once, as well as some borrowers with more than one loan.
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| Total number of externally refinanced mortgages | |||
|---|---|---|---|
| Number (June 25 qtr) | Change since previous quarter | Year-on-year change | Total since start of hikes |
| 98,681 | +0.8% | +21% | 1.26 million |
Source: Canstar.com.au. Notes: number of refinanced loans includes owner-occupier and investor loans, seasonally adjusted data. Total since the start of the hikes is an estimation from May 2022 to June 2025 inclusive.
How much can a typical borrower save by refinancing?
While Australians with variable home loans will be breathing a sigh of relief after 0.75 percentage points worth of cash rate cuts, many borrowers could cut their rate even further by refinancing.
A borrower with a $600,000 loan today and 25 years remaining could potentially save more than $12,000 over the next two years by switching to a competitive rate of 5.25%, even after factoring in estimated switch costs of $1,150.
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| Potential impact from refinancing a $600k loan | |||
|---|---|---|---|
| Variable rate today | Monthly repayments | Cost – next 2 years | |
| Complacent borrower | 6.36% | $3,999 | $72,463 |
| Refinance to a competitive rate | 5.25% | $3,595 | $60,340 |
| Difference | -1.11% | -$403 | -$12,124 |
Source: Canstar.com.au. Notes: calculations are based on an owner occupier paying principal and interest with a $600k debt and 25 years remaining in Sept 2025. The complacent variable borrower rate assumes the person has not renegotiated their rate since May 2022. Costs include $1,150 in switch costs but not ongoing fees and that variable rates change in line with CBA’s cash rate forecast.
Gap between new and existing customer rates closing
RBA data shows the gap between the average existing owner-occupier variable rate and the average new customer rate is now at the narrowest point recorded in the dataset.
This is due to the fact that borrowers are refinancing and / or haggling with their current bank for better rates, with the data showing the average owner-occupier has negotiated their way out of 0.82 percentage points of rate hikes over the last three years.
At its widest point in October 2022, the gap between the average owner-occupier variable rate across the whole market and new customer rate was 0.51 percentage points.
Today, that gap has shrunk to just 0.04 percentage points – the smallest difference recorded in recent RBA data.
Loyal borrowers missing out on savings
Canstar’s data insights director, Sally Tindall says, “Almost 100,000 mortgages switched lenders in the past three months – that’s more than 1,000 loans switching every single day.”
“This exodus by borrowers away from sub-standard mortgage rates is terrific. The RBA might have served up rate cuts on a platter, however, that hasn’t stopped tens of thousands of Australians from seeking out even better deals.
“As a result, we’ve gradually seen the average owner-occupier variable rate fall by a lot more than what the RBA has plated up, thanks to hordes of borrowers proactively switching lenders and haggling with their current bank for a better deal.
“The fact that the gap between the average and new customer variable rates for owner-occupiers has narrowed to basically nothing is testament to this.
“However, there are still millions of borrowers who haven’t switched and there’s a good chance these loyal customers are paying too much.
“After this latest cut filters through, we expect there will be over 30 different lenders offering at least one variable rate under 5.25 per cent. Switching to a rate around this mark could save a typical borrower with a $600,000 debt over $12,000 in the next two years, even after switch costs are factored in.
“That’s money some borrowers are blindly handing to their bank out of loyalty.”
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This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
