If rising mortgage repayments are putting pressure on your budget, the good news is you do not need to wait for the Reserve Bank to cut interest rates. Thousands of borrowers are already saving money each quarter by renegotiating or refinancing. However, success depends on how you engage with your lender, especially since the most competitive deals often go to those who come prepared and negotiate smartly.
Over the past year, more Australians have been refinancing their home loans, with brokers reporting a 40% increase in clients searching for better options. With higher interest rates and tighter household budgets, many lenders are now more responsive. This is a clear shift from past years, when banks often overlooked requests to review loan rates.
Refinancing can reduce your mortgage interest rate by about 0.8%, with some borrowers achieving cuts close to a full percentage point. The process takes more than just a request. Brokers suggest using quotes from other banks to show what is available elsewhere, which prompts retention teams to act. Some borrowers also use a document called a mortgage discharge authority to signal they are ready to take their loan to another lender.
This form tells your bank that you intend to close your mortgage and move it elsewhere. Since banks focus heavily on keeping existing customers, they often respond quickly to these signals. However, you may not need to go that far. Simply showing with clear numbers that better deals exist can often be enough to secure a lower rate.
Hundreds of lending products are currently available, each with different approval criteria and features. Your ability to borrow can vary widely based on your loan-to-value ratio. In fact, applicants with similar incomes can qualify for very different loans depending on how each bank assesses risk. This means older borrowers or people with variable income, such as bonuses, may still be eligible for strong offers if they present their financial position clearly.
If you want to stay with your current bank, using the right language can improve your chances of a discount. For example, saying “I am considering signing a discharge authority” signals your intent to leave, which often leads to action from the lender. In a market where around 100,000 borrowers refinance each quarter, banks are more committed than ever to retaining their clients.
