Lenders get competitive as refinancing activity reaches new levels
Despite the Reserve Bank of Australia’s decision to maintain the official cash rate in its latest monetary policy meeting, home loan providers have persisted with their own rate adjustments, with recent data from Canstar.com.au indicating that two banks reduced variable rate offerings within the past seven days and six others cut fixed rates during the preceding fortnight.
Regional players get serious
Geelong Bank has emerged with the most competitive variable rate proposition at 4.99%, positioning itself at the market’s lower end. Identical rates of 4.99% are available through G & C Mutual and Horizon Bank, although these institutions restrict such offerings to first-time property purchasers.
Variable rate movements have been comparatively muted, with no lenders choosing to increase their variable offerings over the two-week period. The monitored average across the sector stands at 5.52%, with 4.99% representing the floor for both those refinancing and entering the market. Forty-seven lenders currently provide at least one variable rate option beneath 5.25%.
Some fixed rates rising
The fixed rate landscape presents a contrasting picture. Eight lenders, including Westpac and its affiliated brands, Macquarie Bank, Heritage Bank, People’s Choice and Queensland Country Bank, have increased their fixed rate products.
Conversely, six mortgage providers – Reduce Home Loans, G & C Mutual, Geelong Bank, Unity Bank, Community First Bank and Illawarra Credit Union – have moved in the opposite direction.
The average short-term fixed rate for proprietor-occupiers has reached 5.2%. Pacific Mortgage Group offers the lowest one-year term at 4.84%. Across all lenders assessed, forty-two institutions provide at least one fixed rate product below 5%, with approximately 77% of lenders’ most competitive rates structured as fixed rather than variable.
Refinancing heats up
Australian Bureau of Statistics data for the September 2025 quarter reveals that $65.8 billion in mortgage obligations transferred between lenders. Analysis by Canstar calculated this represented nearly $500,000 per minute in refinancing activity.
Refinancing surged by $3 billion compared with the preceding quarter. This acceleration likely stems from rate reductions announced by the Reserve Bank during February, May and August, prompting borrowers to examine whether existing loan arrangements remained competitive.
Since monetary policy tightening commenced in May 2022, approximately 1.4 million mortgages have switched lenders, according to seasonally adjusted figures. This aggregate encompasses some borrowers who may have undertaken multiple refinancing transactions and those maintaining more than one loan facility.
“Almost half a million dollars in loans being refinanced to a new lender every minute is a jaw-dropping figure,” said Laine Gordon (pictured right), spokesperson at Canstar.com.au. “It shows Australian borrowers are laser-focused on cutting their mortgage costs where they can.
“Record levels of new lending shows buyers are back in force, but with new loan sizes also reaching a peak, some are taking on bigger debts to secure the winning bid on their future home.
“Before you take out a loan, stress test your budget. Ask yourself if you could still manage the repayments if rates climbed by three percentage points. While that may seem unlikely today, a lot can change over the life of a 30-year mortgage.”
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