Best new refinancing deals for November 2020

With the Reserve Bank of Australia (RBA) cutting the cash rate to a new record low of 0.10 per cent, home loan borrowers have never had more ammunition when it comes to refinancing.

The RBA cash rate is currently sitting at an historic low, with only 10 basis points separating it from zero. In such a low-rate environment, borrowers with banks not passing on rate cuts may be wondering if now is the time to consider refinancing.

There are a range of benefits to refinancing, including

• Switching to a lower interest rate;
• Switching to pay less fees;
• Switching to gain features, like an offset account or redraw facility; and
• Switching to free up some equity.

In this environment when your lender and others are likely offering more competitive rates to new customers, and not always passing them on to existing customers, the onus is on the borrower to seek them out.

Firstly, contact your lending by picking up your phone or hopping online. Ask them for a rate cut. Look on their website to see what rates they’re offering new customers and, if you are paying more, ask them to match this. You have nothing to lose and everything to gain just by asking.

If your lender refuses, hop online and look at some more competitive options. There are a range of home loans now offering interest rates starting with a 1. You may want to create a short list of new loan options and threaten your lender with switching to one of these. If they still don’t budge, you’ve now got a short list of new options to refinance to.

Competitive refinancing home loans for November

Here are some of the lowest interest rates available to refinancers for November. Keep in mind that due to the cash rate cut, some new rate home loan commencement dates may be in the future.

A lot of the lowest refinancing rates come with lower LVRs (70 per cent or less). Refinancers have an advantage here over new customers, as years of paying down equity makes meeting these LVR requirements a little easier than saving up a 30 to 40 per cent deposit on a home.

Lowest owner-occupier variable home loans (P&I)

Source: RateCity.com.au. Data accurate as of 09/11/2020.

Lowest owner-occupier fixed home loans (P&I)

Source: RateCity.com.au. Data accurate as of 09/11/2020.

Lowest investor variable home loans (P&I)

Source: RateCity.com.au. Data accurate as of 09/11/2020.

I deferred my mortgage. Can I still refinance?

For the same reason that the RBA was encouraged to cut the cash rate, not every Australian will be in the best position to refinance. If the economic impacts of the Covid-19 pandemic means you’ve lost your job or deferred your mortgage, you may not be able to refinance right now.

You may instead need to consider sticking with a higher variable rate or fixing on a lower rate for a set period of time. Switching lenders may not be available for you, but once you get back to making regular repayments and paying down the equity in your home, you’ll gain back your bargaining power. This means you may be in a better position to refinance in the future.

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