RBA cuts rates for the first time in four years – is now the time to refinance?

By Jasmine Gearie · · 3 min read
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Governor of the Reserve Bank of Australia (RBA), Michele Bullock, at a news conference.

The Reserve Bank of Australia’s (RBA) decision to cut the cash rate by 0.25% at its February meeting may only represent a small saving for some borrowers, but Mozo’s research indicates it could also drive an uptick in home loan refinancing.

Mozo’s survey data has found that almost half (49%) of mortgage holders are weighing up their options following the RBA’s first cut in four years.

According to Mozo’s research, 35% of Australian borrowers are now considering refinancing their home loans in response to the February cut, while 14% are definitely planning to refinance.

Are you planning to refinance your home loan if rates decrease after February 2025?

Response% of mortgage holders
No
48%
Considering it
35%
Yes
14%
I have recently refinanced
4%
Source: Mozo commissioned a nationally representative survey of 1,021 Australian mortgage holders aged 18 years and over, with information collected between December 2024 and January 2025.

Still, a whopping 48% of borrowers surveyed said they are not planning to refinance following an official cut to the cash rate.

If you’re in this camp, we’d still suggest taking a look at our rate change tracker to see if your lender is passing on the RBA’s cut. If not, you may want to reassess.

How you can give yourself a rate cut

As detailed in our Home Loan Report for 2025, it’s possible to give yourself an interest rate cut by comparing home loans and switching to one of the recent winners of the Mozo Experts Choice Awards.

When it comes to variable rates, the average rate in the Mozo database is 6.71% p.a. across all lenders. However, the average variable rate among the Experts Choice Award home loan winners is 6.01% p.a.

That represents a significant drop of 0.70% (70 basis points), which is close to almost three RBA cuts of 0.25% each.

This could translate to about $217 saved in monthly repayments on a $500,000 loan by switching from the average rate, or $358 by switching from the average Big Four rate as shown in the table below.

Lender typeAverage rate (p.a.)Monthly repayment
All lenders in the Mozo database
6.71%
$3,441
Big Four banks (ANZ, CommBank, NAB, Westpac)
7.15%
$3,582
Mozo Experts Choice Award Winners
6.01%
$3,224

Source: Mozo database. Accurate as at 12 Feb 2025, average variable rates for owner occupier, principal & interest home loans, interest paid over a 25 year loan term, 80% LVR, $500,000 loan amount. Average for MECA winners based on the rates of MECA winning products on 12 Feb 2025, using the same criteria.

What about fixed interest rates?

While those locked into a fixed rate now will have trouble refinancing, it may be a consideration for those currently on a higher variable rate who are looking for more certainty with their repayment amount.

We examined two-year fixed rates in our database, and found that among the award-winners, the average fixed rate was 5.72% p.a.

Meanwhile, the average rate for fixed loans across all lenders in our database was 6.04% p.a. – some 0.32% (32 basis points) higher.

Keep in mind however that fixing to a lower rate doesn’t guarantee you’ll be in a better position down the road. For example, should interest rates fall further, many variable rate home loans will receive rate cuts while your loan is fixed for a set term.

Lender typeAverage rate (p.a.)Monthly repayment
All lenders in the Mozo database
6.04%
$3,234
Big Four banks (ANZ, CommBank, NAB, Westpac)
6.09%
$3,249
Mozo Experts Choice Award Winners
5.72%
$3,136

Source: Mozo database. Accurate as at 12 Feb 2025, average fixed rates for owner occupier, principal & interest home loans, interest paid over a 25 year loan term, 80% LVR, $500,000 loan amount. Average for MECA winners based on the rates of MECA winning products on 12 Feb 2025, using the same criteria.

How borrowers can respond to an RBA move

Mozo’s money expert, Rachel Wastell, says it’s important to keep in mind the difficulty of predicting interest rates amid shifting economic conditions, inflation and geopolitical factors.

“As we saw with the previous cycle of rate hikes, things can change rapidly. Homeowners need to stay proactive and be ready to manage their home loans, especially as interest rates continue to fluctuate,” says Wastell.

“Refinancing isn’t just about chasing a lower interest rate – it’s about getting a complete view of your financial situation. Consider all the factors, including loan fees, repayment flexibility, and features available with other lenders.”

Start comparing home loans now 

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Last updated 10 March 2025 Important disclosures and comparison rate warning*
What are your home loan needs?
Loan purpose
Buying or Refinancing
  • Promoted

    Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.65 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • RATE CUT NOW LIVE!
    • The first home loan with an increasing discount (conditions apply)
    • No application or banking fees
  • Promoted

    Variable Home Loan 90

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.79 % p.a.
    Variable
    Comparison rate
    5.83 % p.a.
    Initial monthly repayment
    $2,931
    Go to site
    • RATE CUT NOW LIVE!
    • No monthly or ongoing fees
    • Option to add an offset for 0.10%
  • Promoted

    OMG Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.77 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • No ongoing annual fees
    • Pre-approval valid for 3 months

  • Basic Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 30% min deposit
    • Redraw available
    Interest rate
    5.55 % p.a.
    Fixed 2 years
    Comparison rate
    5.85 % p.a.
    Initial monthly repayment
    $2,855
    Go to site
    • No ongoing fees
    • Free redraw from your loan using Macquarie Online.
    • No application or account management fees

  • Offset Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 30% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.55 % p.a.
    Fixed 2 years
    Comparison rate
    6.08 % p.a.
    Initial monthly repayment
    $2,855
    Go to site
    • Open up to 10 offset accounts
    • No fee to redraw or split into multiple loan accounts
    • Variable and fixed rates available

  • Fixed Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    • Redraw available
    • Cashback
    Interest rate
    5.69 % p.a.
    Fixed 2 years
    Comparison rate
    6.00 % p.a.
    Initial monthly repayment
    $2,899
    Go to site
    • Get up to $4,000 cashback (T&Cs apply)
    • Up to 12 months repayments in advance without penalties
    • Split loan available

  • Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.65 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • RATE CUT NOW LIVE!
    • The first home loan with an increasing discount (conditions apply)
    • No application or banking fees

  • Simple Home Loan Variable

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.74 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • No application, ongoing or monthly fees
    • Make additional repayments at any time
    • Access your money via internet banking at any time

  • OMG Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.77 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • No ongoing annual fees
    • Pre-approval valid for 3 months

  • Fixed Rate Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    Interest rate
    5.74 % p.a.
    Fixed 2 years
    Comparison rate
    5.96 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • No ongoing annual fees
    • Make up to $25,000 extra repayments during a fixed period, fee free (T&Cs apply)
    • Lock in for up to 5 years.
Showing 8 results from 417 home loans. Use the filters to see more

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

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