Variable Home Loan Rates Are Falling: Is It Time for a Refinance Home Loan Review?

The Reserve Bank kept the cash rate steady in June, yet several lenders have quietly cut their own rates anyway. That gap between what the RBA does and what your bank actually charges is exactly why now is the right time to check whether your current loan is still competitive. 

Since 2017, Osinski Finance has helped Perth homeowners navigate changing interest rates with confidence, turning complex bank jargon and market movements into clear, practical advice. Here is what is actually going on, and what it could mean for your mortgage.

Quick Answer: Is It Worth Refinancing Right Now?

Yes, for many homeowners it is worth a look. Even though the RBA held the cash rate steady in June, lenders have been cutting variable rates regardless, and some are now offering well under 6%. These lower rates are usually reserved for new customers, so borrowers who stay loyal to their existing lender often keep paying yesterday's rate. Reviewing your loan against current market offers, ideally with the guidance of a broker who can refinance your home loan, is the best way to determine whether switching could save you money. 

Why Are Lenders Cutting Their Rates?

Competition in the home loan market is intense right now. Over 100 providers, from the big four through to mid-tier banks, regional lenders and a long list of non-bank lenders, are all chasing the same pool of borrowers. In that kind of environment, one of the easiest ways for a lender to win new business is to sharpen its home loan interest rates and hope you switch.

The scramble has picked up pace following proposed tax changes in the federal budget, which have impacted investor demand and pushed some lenders to compete harder for owner-occupier lending. As a direct result, almost a dozen lenders have cut their variable home loan rates in the past few weeks, and there are now 40 lenders offering at least one variable rate under 6%, according to Canstar.

The catch is that these sharper rates are almost always reserved for new borrowers, so the fastest way to benefit is to become a "new" customer yourself by switching lenders.

No Sign of an Official Rate Cut Any Time Soon

Anyone hoping the RBA will simply do the heavy lifting for them may be waiting a while. Several major banks, including ANZ and CommBank, believe it could be some time before the official cash rate moves down, potentially not until well into next year.

In fact, Westpac is forecasting the opposite, with a rate hike pencilled in for September, potentially as early as August. Waiting on RBA relief could mean missing a more competitive rate elsewhere. Keep an eye on where things stand with our interest rate tracker, so you are not caught off guard either way.

Refinancers May Be Rewarded With Valuable Interest Savings

The RBA might have hit pause, but that is no reason for your household budget to do the same. As more lenders cut rates for new customers, homeowners who stick with their existing loan can end up paying an uncompetitive rate, quietly costing them money every month.

Canstar's research shows just how significant the gap between home loan rates can become. A homeowner who has kept the same loan for the past five years is likely paying around 6.98%. If they owe $600,000 with 25 years remaining, refinancing to a rate below 6% could save at least $10,713 in interest over the next two years, even after accounting for  typical refinancing costs. This lines up with broader trends too, with refinancing activity across Australia climbing sharply as more borrowers act on that gap.

Fixed or Variable? What the Current Rate Cuts Mean for Your Loan

Most of the recent cuts have landed on variable products, which naturally raises the question of whether locking in a fixed rate might make more sense instead. There is no single right answer here. A variable home loan rate gives you the flexibility to benefit immediately from further cuts, though it also exposes you to rises like the one Westpac is forecasting, while a fixed rate buys certainty over your repayments for a set period.

The right choice depends on your appetite for risk, how tight your budget is, and how long you plan to stay in the property. See our full breakdown in choosing between fixed and variable home loans before you commit either way. Splitting your loan between both is often a sensible middle ground, and one we regularly walk clients through.

Is Now the Time to Refinance Your Home Loan?

Stop guessing, and start knowing for certain whether your current rate still stacks up. A proper loan review can show whether it makes sense to refinance a home loan with a different lender, or whether staying put is actually the smarter move. Either way, the process should be simple, and the numbers should speak for themselves. 

Key Takeaways

• Almost a dozen lenders have cut variable rates in recent weeks even though the RBA held the cash rate steady in June, and 40 lenders now offer at least one variable rate under 6%.
• These lower rates are typically only available to new customers, meaning loyal borrowers on older loans often miss out unless they actively switch.
• Major banks including ANZ and CommBank do not expect an official RBA rate cut soon, while Westpac is forecasting a possible rate hike as early as August or September.
• A borrower on a $600,000 loan with 25 years remaining could save at least $10,713 in interest over two years by switching from a typical 6.98% rate to one under 6%.
• Fixed and variable loans carry different trade-offs, and the right structure depends on your risk tolerance, budget, and how long you plan to stay in the property.
• A home loan health check with a broker is the only reliable way to know whether refinancing would leave you better off once costs are factored in.

Talk to Osinski Finance About Your Home Loan

Osinski Finance is a family-owned mortgage broking business founded by Nathan and Amy Osinski in Rockingham in 2017, helping clients across Perth and Western Australia access nearly 100 lenders. Whether you're refinancing, investing in property, or buying your first home, our team will guide you through your options without the sales pitch. 

Get in touch today to review your home loan and see whether refinancing could put you in a better position. 

Frequently Asked Questions

Why are lenders cutting home loan interest rates when the RBA hasn't moved? 

Competition between lenders is intense, with more than 100 providers chasing the same pool of borrowers, and recent federal budget tax changes have pushed some to compete harder on owner-occupier lending. Cutting rates is one of the fastest ways to win new customers without waiting on the RBA, which is why individual lenders often move independently of it.

Which lenders have cut their variable home loan rates recently? 

Canstar's research shows almost a dozen lenders have trimmed their variable rates in recent weeks, bringing the total number of lenders offering a variable rate under 6% to 40. The exact lenders and rates change regularly, so it is worth comparing current offers rather than relying on rates you may have seen advertised previously. A broker with access to a wide lender panel can do this comparison for you quickly.

Is it worth refinancing to a lower interest rate? 

For many homeowners, yes, particularly if you have held the same loan for several years without reviewing it. Even a small rate reduction can add up to thousands of dollars in savings over time, as the Canstar example above shows. Running the actual numbers against your loan balance and remaining term is the only way to know for certain in your situation.

How much does it cost to refinance a home loan? 

Refinancing costs typically include discharge fees from your current lender, application or valuation fees from the new one, and potentially lenders' mortgage insurance if your loan balance is above 80% of your property's value. These costs are usually a few hundred to a few thousand dollars in total, depending on your lender and loan size. A good broker will factor these costs into the comparison so you can see your genuine net savings before you commit.

What is the 2% rule for refinancing? 

The 2% rule is an old rule of thumb suggesting you should only refinance if the new rate is at least two percentage points lower than your current one. It is a rough guide rather than a hard rule, and in today's market even a smaller rate gap can be worthwhile on a larger loan balance. The better approach is to compare your actual repayment savings against the real costs of switching, rather than relying on a fixed percentage.

When should you not refinance your home loan? 

Refinancing may not make sense if you are planning to sell the property in the near future, if you are still within a fixed rate period with significant break costs, or if the savings on offer do not outweigh the switching costs involved. It can also be less worthwhile if your loan balance is small or your remaining term is short. A broker can quickly tell you whether any of these situations apply before you go to the effort of switching.

Will home loan interest rates come down further this year? 

Forecasts are mixed: ANZ and CommBank expect the cash rate to stay on hold for a while yet, while Westpac is forecasting a possible hike as early as August or September. Either way, individual lenders keep adjusting their own rates based on competition, so it is worth checking yours periodically rather than waiting on the RBA.

How much could I save by refinancing to a lower variable home loan rate? 

It depends on your loan balance, remaining term, and the size of the rate reduction. Canstar's modelling shows a borrower with $600,000 owing and 25 years remaining could save over $10,000 in interest across two years by switching from a typical loyalty rate to one under 6%. Larger balances and longer terms tend to produce bigger savings, so running your specific figures is the best way to get an accurate estimate.

Do the lower advertised rates apply to existing customers too? 

Usually not. Most rate cuts target new customers, so existing borrowers need to actively switch lenders, or negotiate with their current one, to access the same pricing. Simply waiting for your lender to pass on a comparable rate rarely works.

How do I know if refinancing is the right move for me? 

The clearest way is to have your current loan reviewed against what is genuinely available across the market, including the switching costs. A mortgage broker can run that comparison for you and give you a straight answer either way. If you would like that done for your loan, Osinski Finance is happy to run the numbers with no obligation.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.