Refinancing: Broker Outlines Hypothetical $3,000 Annual Savi

Published 5 November 2026. With the Reserve Bank's cash rate now at 4.85 per cent—its highest level since 2008 following five hikes this year—Australian mortgage holders are absorbing significant additional costs. But realestate.com.au reports that refinancing could offset much of that pain.

The Cost of Five Rate Hikes

The RBA's fifth increase, delivered on Melbourne Cup day, has prompted Macquarie, Westpac, NAB, Commonwealth Bank and ANZ to pass on the full rise to variable home loan customers, effective from Friday, November 13. On a $500,000 mortgage, this latest hike adds roughly $77 per month, bringing the cumulative increase to around $380 per month. A $700,000 loan faces an additional $107 monthly, with total increases reaching approximately $532 per month. On a $1 million mortgage, the latest rise adds about $153 per month, lifting cumulative increases to around $759 per month.

The Refinancing Opportunity

Veteran mortgage broker John Maxwell argues that many stressed homeowners overlook a practical lever within their control. On a hypothetical $800,000 mortgage at 7 per cent over 30 years, reducing the rate by just half a percentage point would save approximately $266 per month, or more than $3,000 annually. Maxwell notes this saving is nearly half the extra amount an average borrower must find each year following five rate hikes.

"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 told realestate.com.au. He advocates reviewing options among Australia's more than 100 home lenders rather than assuming the major banks offer the only competitive rates.

Current Market Rates

As of early November, Maxwell cited competitive variable rates including Gateway Bank at 6.14 per cent, Teachers Mutual and Newcastle Permanent at 6.19 per cent, Macquarie and MyState Bank at 6.29 per cent, and ANZ and Zeus at 6.33 per cent.

Loan Structure Beyond Headline Rates

Maxwell emphasises that headline rates tell only part of the story. "Loan structure, features and fees can all change the picture," he noted. In Australia, interest is calculated daily on the outstanding balance. Borrowers comparing lenders on advertised rates alone may still end up worse off if fees and structure are overlooked.

For a structured comparison, see fixed vs variable rate mortgages.

What Borrowers Should Do

Maxwell recommends an independent broker review rather than contacting only an existing lender.

Frequently Asked Questions

What is the cumulative monthly cost increase on a $500,000 mortgage following five rate hikes?

On a $500,000 mortgage, this latest hike adds roughly $77 per month, bringing the cumulative increase to around $380 per month.

Why might homeowners still end up worse off when comparing lenders on advertised rates alone?

Borrowers comparing lenders on advertised rates alone may still end up worse off if fees and structure are overlooked.

How is interest calculated on mortgages in Australia?

In Australia, interest is calculated daily on the outstanding balance.

This article was produced with AI assistance and reviewed for accuracy. Content is for informational purposes only and does not constitute financial or property investment advice.

Refinancing: Broker Outlines Hypothetical $3,000 Annual Saving