Mortgage broker urges Australian borrowers to refinance amid record-high rates

Australian homeowners are facing the highest mortgage rates in 18 years after the Reserve Bank of Australia raised the cash rate to 4.85%, its highest level since 2008. Major lenders, including Westpac, NAB, Commonwealth Bank and ANZ, plan to pass the full increase on to variable-rate borrowers from 13 November.

John Maxwell, co-founder of The Mortgage Coach, says many borrowers overlook refinancing as a way to reduce monthly payments. He notes that on an $800,000 loan at a 7% interest rate, a half-percentage-point reduction could lower the monthly payment by about $266, saving more than $3,000 annually and up to $96,000 over the loan term.

"A lender can only offer you what’s on its own shelf, and the best rates often go to new customers, not loyal ones," Maxwell said.

He adds that loan structure, features and fees also affect total costs and that an independent broker review can reveal alternatives among more than 100 Australian lenders. Current competitive rates cited include Gateway Bank at 6.14%, Teachers Mutual and Newcastle Permanent at 6.19%, and ANZ and Zeus at 6.33%.

Maxwell warns borrowers not to assume they are locked into their existing bank and encourages them to understand daily compound interest calculations that influence long-term mortgage balances.