ABS data shows nearly 100,000 borrowers switched lenders in Q1 as rate competition intensifies
Following a Mortgage Choice report showing a surge in refinancing activity, new figures from the Australian Bureau of Statistics (ABS) confirm a significant increase in home loan refinancing in the first quarter of 2025, reaching the highest level since September 2023.
According to the latest seasonally adjusted ABS Lending Indicators data, nearly 100,000 mortgage holders changed lenders between January and March. Analysis by financial comparison site Canstar indicates that more than one million home loans have been refinanced since the Reserve Bank of Australia (RBA) began increasing the cash rate three years ago. These figures include cases where borrowers may have refinanced more than once or hold multiple loans.
“Refinancing is back in vogue with almost 100,000 loans switching to a different lender in the first three months of this year,” said Sally Tindall (pictured above), data insights director at Canstar. “Today’s figures from the ABS show refinancing has lifted to the highest point since the September quarter in 2023.”
Tindall said refinancing numbers could rise further if the RBA moves to lower the cash rate in its next meeting. With speculation mounting around a possible rate cut at the RBA’s upcoming meeting, she is, however, encouraging borrowers not to delay decisions based on central bank actions.
“Rather than relying solely on the board’s decision, borrowers should take matters into their own hands and turn the potential for a rate cut into a reality by taking action themselves,” Tindall said.
Canstar’s modelling suggests that refinancing a $600,000 loan with 25 years remaining to a rate of 5.75% could lead to savings of over $12,000 in two years, even after accounting for switching costs estimated at $1,150.
As lenders continue to compete for refinancing business, many are now prioritising rate cuts over cash incentives. While cashback deals were widespread during the refinancing peak, most major banks have since withdrawn from the practice.
Only nine lenders are currently offering cashback incentives, a sharp drop from the 35 who did so in March 2023, according to Canstar data.
In recent weeks, Westpac rolled out a digital home loan product for refinancers with rates starting at 5.84%. Commonwealth Bank of Australia (CBA) also lowered its lowest advertised variable rate to the same level. Twelve lenders have trimmed at least one variable rate in the past month, with 35 offering advertised rates below 5.75%. The current lowest variable rate sits at 5.59%.
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