Recent history suggests rate cut will drive refinancing surge

Market commentators are expecting a big jump in refinancing activity in the coming weeks, given that numerous borrowers switched home loans earlier in the year following the previous cash rate cut, in February, by the Reserve Bank of Australia.

Equifax, a credit reporting agency, has reported that the number of mortgage applications in the first quarter of 2025 was 5.2% higher than the same quarter the year before. Refinancers played a major role in that increase, with refinancing accounting for 37% of mortgage demand in the month of March.

3 key things to consider before refinancing your home loan:

1. Review your financial position. Confirm you have enough equity in your property, a large enough income and a strong enough credit score to qualify for a new home loan. Also, make sure refinancing aligns with your goals, whether that's reducing your repayments, conducting a debt consolidation or 'cashing out' equity (e.g. to fund renovations).
2. Do a cost-benefit analysis. Make sure the savings you would get from switching home loans would exceed the costs, which may include discharge fees, break fees, application fees and lenders mortgage insurance.
3. Take a holistic view. When comparing loan options, it's important to look beyond the rate, because the lowest-rate loan won't always be the most suitable option for you. That's why you should also consider things like loan features and repayment flexibility.

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