The Reserve Bank (RBA) has reduced the cash rate by 0.25% at its recent February meeting, marking the first adjustment of its kind in four years.
This modest reduction might seem minor, but it has prompted a significant portion of borrowers to contemplate refinancing, according to new data from Mozo.
Mozo’s latest survey revealed a striking interest in refinancing among Australian borrowers: 35% are now considering refinancing their home loans, while 14% have firmly decided to take action following the rate cut.
However, nearly half of the respondents (48%) have opted not to refinance in light of the rate decrease.
For those undecided, Mozo recommends checking whether their lenders are passing on RBA’s cut, which could influence their decision to stay or switch.
Mozo’s 2025 Home Loan Report highlighted a proactive approach to reducing borrowers’ interest rate.
By comparing home loans and opting for lenders recognised in the Mozo Experts Choice Awards, borrowers can effectively “self-apply” a rate cut.
The average variable rate among these loans is significantly lower at 6.01% p.a., compared to the broader market's 6.71% p.a. This adjustment alone equates to roughly three RBA cuts of 0.25% each.
Switching from an average rate to an award-winner could save approximately $217 monthly on a $500,000 loan.
According to Mozo, opting out of the big four’s average rates into the lower rates offered by these top performers could increase monthly savings to $358.
For those on variable rates seeking more stability, Mozo’s research into two-year fixed rates among award-winning loans showed an average of 5.72% p.a., which is 0.32% lower than the market average.
Yet, borrowers should be wary of fixing rates as future rate drops could disadvantage fixed-rate holders compared to those on variable rates.
Rachel Wastell (pictured above), Mozo’s finance expert, urged borrowers to remain vigilant and proactive.
“As we saw with the previous cycle of rate hikes, things can change rapidly,” Wastell said. “Homeowners need to stay proactive and be ready to manage their home loans, especially as interest rates continue to fluctuate.”
She emphasised that refinancing should involve a thorough review of one’s financial situation, considering factors beyond just the interest rate, such as loan fees, repayment flexibility, and additional features offered by alternative lenders.
