Back to Inspire Home


What you need to know about refinancing in 2020

By ,| 5 min read

Get a free property report in seconds

Search an address for price estimates and sales history.

Search a property

Finances, at a macro and micro level, have never been as important to Australians as they are today.

As a result, at Lendi we’ve witnessed a huge surge in refinance activity in recent months.

Our team of experts decided to deep dive into the stats, looking at owner occupier loans settled on the Lendi platform over the first six months of 2020 to reveal five key insights every homeowner should know.

Calculate your loan repayments


Here are our top 5 insights for homeowners in 2020:

1. Interest rates charged by Big 4 Banks continue to be higher than non-big 4 banks

Our study of owner occupier loans settled by Lendi over the first six months of 2020 shows that median interest rates charged by the likes of NAB, CBA, ANZ and Westpac were, on average, 8 basis points (bps) higher than the other banks.

The premium on big four interest rates peaked for loans settled in March at 12 bps higher than the others.

With the rising competition in the home loan market, even the big four banks have revised their offers. Banks, big and small, are now competing to secure good customers from a growing refinance market and a smaller pool of new purchase customers.

From the big four, we've seen cashback offers and record low fixed rates. In fact, their median rates were 20 bps lower for loans settled in April, when compared to March. In April, they were even undercutting the smaller lenders slightly.

However, we witnessed a return to the status quo in the last few months as competition intensified and smaller lenders ended June with lower median rates.

Check today's low rates

Tell us what you are looking for and see if you can save.

Search rates

2. It takes longer to refinance your loan with the big four banks

The big four banks took significantly longer to process loans for customers.

During the first half of 2020, the average time to refinance your loan with the big four banks was 54 days, as opposed to 36 days with non big four lenders.

If you are thinking about refinancing and need the process to be done quickly, it might be worth exploring options with smaller lenders.

3. By refinancing, you can save on average $2295 a year

Lendi data shows homeowners were able to reduce the interest rate on their owner occupier home loans by an average of 96 bps by refinancing during the first half of 2020.

On a loan of $407,000 this represents an annual saving of $2,295.

That’s $2,295 in unnecessary interest payments you’re putting into the banks’ pockets every year. In the current economic climate, it’s important to keep on top of your finances and cut unnecessary spending where possible.

How much can you save by refinancing?

Find out what your new repayments might be in seconds.

Find a deal now

4. Banks slow to discharge loans is costing Aussie homeowners

When you refinance your home loan, a mortgage release or discharge needs to be recorded to legally release your current lender from mortgage obligations.

Although our data shows that the discharge time can be anywhere between 5 to 25 days, lenders take on average 16 business days to discharge a loan before a customer can refinance.

A slow discharge time is not only frustrating for the customer, it also foregoes savings on interest repayments whilst waiting for the discharge request to be approved by their outgoing lender.

Our analysis of ABS data shows over $2.7 million in interest savings were left on the table by homeowners during the discharge process in May alone.

5. Even before social distancing Australians were embracing online home loan processes

Even prior to the pandemic, here at Lendi we were seeing an increasing number of borrowers embracing the online home loan process.

But with social distancing and lockdown measures in place, we have noticed a significant shift towards online home loan applications.

Lendi saw an increase of over 50 per cent in the volume of loans settled on its platform in the three months to the end of June 2020, when compared to the same time last year.

If you are a homeowner who hasn’t reviewed their rates in the last 6 to 12 months, now is the perfect time to do it. You can review your current home loan interest rate here.

Calculate your monthly home loan repayments

Find out if you can save with a lower interest rate.

Calculate now

Got a home loan question? Just ask!

We're here to help. Get free expert advice at a time that suits you. Choose a time to chat with a Home Loan Specialist here

The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.

Tags: interest rate, refinance, big 4 banks, saving, application form, home loan

Check today's low rates

Tell us what you are looking for and see if you can save.

Search rates

Check today's low rates

Tell us what you are looking for and see if you can save.

Search rates
Home loan repayment saver tool

Home loan repayment saver tool

Enter a few details about your home loan and see how much you could save on your repayments

Important legal stuff
Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 25 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. Lendi Group Pty Ltd, which is the ultimate holding company of the Aussie and Lendi businesses is owned by numerous shareholders including; banks such as CBA, 1835i (ANZ’s external venture capital partner) and Macquarie Bank, the Lendi founders and employees, and a number of Australian institutional investors and sophisticated investors including UniSuper.
*WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria. Top rates include lenders who are on our panel and are then defined by the circumstances provided by the borrower.
Made with love at Circular Quay in Sydney, Australia. © 2022. All rights reserved.