How does your home loan compare?

Is your home loan still competitive? A low advertised interest rate can catch your attention, but comparing home loans properly means looking at your rate, fees, features, remaining loan term and the potential cost of switching.

If it has been a while since you reviewed your mortgage, our home loan refinancing service can help you compare your current loan with suitable alternatives and understand whether switching lenders could genuinely improve your position.

You do not necessarily need to refinance simply because another lender advertises a lower rate. But you also should not assume your current lender is still competitive just because your loan was a good deal when you first took it out.

How do you know if your home loan is competitive?

Start by checking the interest rate you are actually paying.

Your latest home loan statement or online banking should show your current rate. Once you know that figure, you can compare it with loans available to borrowers with circumstances broadly similar to yours.

The important word is similar.

A headline rate advertised by a lender may apply only to certain borrowers, loan amounts, property types or loan-to-value ratios. Comparing your loan with an advertised rate you would not qualify for can give you a misleading picture.

A useful home loan comparison should consider:

• your current interest rate;
• whether the loan is variable or fixed;
• the outstanding loan balance;
• your estimated property value and loan-to-value ratio;
• annual and ongoing fees;
• offset or redraw facilities;
• the remaining loan term;
• the repayments on an alternative loan;
• the cost of leaving your existing lender; and
• the costs involved in establishing the new loan.

Do not compare your rate with the cash rate

The Reserve Bank of Australia’s cash rate influences home loan pricing, but it is not the interest rate homeowners pay on their mortgages.

Lenders set their own home loan rates, and different lenders can change their pricing at different times.

At 8 November 2026, the RBA cash rate target is 4.85% following a 0.25 percentage point increase effective from 4 November 2026.

By comparison, the RBA’s latest published lender data for September 2026 showed average rates on new owner-occupier housing loans of 6.22% across principal-and-interest and interest-only lending.

Those figures illustrate why the cash rate should be treated as economic context rather than a benchmark for what your personal mortgage rate should be.

Compare like with like

Home loan rates can vary according to the borrower, property and product.

For example, a borrower with substantial equity in an owner-occupied property may be offered different pricing from a borrower with a high loan-to-value ratio or an investment property.

Similarly, a basic variable home loan without an offset account should not necessarily be compared purely on rate with a package loan offering additional features.

Before deciding that another loan is cheaper, compare loans on a reasonably equivalent basis.

Your property equity can affect your refinancing options

One factor worth checking is your loan-to-value ratio, commonly known as LVR.

LVR compares the amount you owe with the value of the property securing the loan.

For example, if your home is valued at $1,000,000 and your loan balance is $650,000, your approximate LVR is 65%.

Having more equity can potentially give you access to a wider range of refinancing options, subject to lender policy, serviceability and the rest of your financial circumstances.

Remember that a refinancing lender normally conducts its own valuation, so the value you estimate for your property may not be the value the lender uses.

Look beyond the advertised interest rate

A lower interest rate can be valuable, but it is not the only cost that matters.

Check whether the alternative home loan has:

• an annual package fee;
• monthly or ongoing account fees;
• application or establishment costs;
• valuation fees where applicable;
• offset account fees or conditions;
• different redraw rules;
• discharge and switching costs; or
• features you are paying for but may not use.

The comparison rate can provide useful additional information because it incorporates the interest rate and certain fees and charges into a single percentage. However, it still cannot reflect every borrower’s circumstances or every possible cost.

Could a small rate difference matter?

Even a relatively small interest-rate difference can matter when the loan balance is large.

For example, on a $600,000 principal-and-interest home loan with 25 years remaining, a reduction of 0.25 percentage points could potentially reduce the required repayment by roughly $90 a month, depending on the starting rate and loan structure.

But that does not automatically mean refinancing is worthwhile.

If it costs several thousand dollars to switch lenders, it may take considerable time for the lower repayments to recover those costs.

That is why the potential saving should be compared with the total cost of refinancing.

Check whether you are paying a loyalty penalty

Homeowners can sometimes remain on the same loan for years without checking whether their lender has more competitive pricing available.

If your current rate looks high compared with suitable alternatives, one option may be to ask your existing lender to review your pricing.

The lender may decline, offer a reduction or propose a different product.

Asking your existing lender for a better rate does not prevent you from investigating refinancing options elsewhere.

When refinancing could make sense

Refinancing may be worth investigating when:

• your current rate is no longer competitive;
• your fixed-rate period is ending;
• you want different loan features;
• you have built substantial equity;
• your financial circumstances have improved;
• you want to restructure your lending;
• you need an offset account or different repayment features; or
• the potential longer-term benefit appears to outweigh the switching costs.

When staying with your existing lender may be better

A lower advertised rate does not always justify moving.

Staying with the existing lender may make more sense where:

• the difference in rates is very small;
• switching costs outweigh the likely benefit;
• your existing loan has valuable features you would lose;
• you expect to sell the property soon;
• your borrowing capacity has changed;
• your credit circumstances make refinancing difficult; or
• the new loan would extend your debt unnecessarily.

The aim should be to improve your overall financial position rather than refinance simply for the sake of changing lenders.

How often should you review your home loan?

There is no single review timetable that suits every borrower, but checking your home loan regularly can help identify when the market or your own circumstances have changed.

A review can be particularly worthwhile when:

• your lender changes your interest rate;
• a fixed-rate period is approaching its end;
• your income or employment changes;
• your property value or equity changes substantially;
• you are considering renovating or investing;
• you want to change loan features; or
• you have not reviewed the loan for a considerable period.

How CBM Mortgages can compare your home loan

You do not need to rely on advertised rates alone to decide whether your mortgage is competitive.

CBM Mortgages can review your existing loan and compare suitable alternatives from lenders available through our panel.

We can consider your current rate, loan balance, property equity, loan features, borrowing position and potential switching costs to help determine whether refinancing is worth exploring.

If the numbers suggest your current loan remains suitable, refinancing simply to obtain a marginally different rate may not be worthwhile.

Frequently asked questions

Disclaimer: This article provides general information only and does not constitute personal financial, legal, tax or credit advice. Interest rates, lender policies, fees and eligibility requirements can change. Consider your individual circumstances, the terms of your existing loan and the costs of switching before refinancing or making changes to your home loan.