refinance-mortgage-saves-thousands-feature
Image: Canva.
  • 14 Victorian suburbs made the list, with four in NSW and two in WA
  • Refinancing could save borrowers as much as $300K depending on their suburb
  • Reduce Home Loans said the data is timely as many Aussies' loan terms are about to expire or recently have

Earlier this month, the Reserve Bank of Australia (RBA) announced another rise in the cash rate from 0.85% to 1.35%.

That news added to the financial anxiety of Australians, with the disquiet stirred up in headlines around Australia not particularly useful. The continual rise of interest rates should be expected and should not be feared.

While mortgage stress is indeed expected to hit one in four Australians, experts expect a return to what is near enough to business as usual.

Interest rates will return to pre-pandemic levels, or in other words, “normal”, and house prices will begin to moderate, and in some cases, fall; indeed, a rise in interest rates from extraordinary pandemic levels could be considered a sign our economy is firing back up.

The latest

New research has ranked the top suburbs where refinancing will save you thousands.

The research was commissioned by Reduce Home Loans, ranking the top 20 ‘mortgage belt’ suburbs in Australia by how much they could save if they refinanced.

Reduce Home Loans first established which suburbs were in the ‘mortgage belt’ by sorting suburbs by the estimated number of houses with mortgages.

The research then assumed that, in June 2019, buyers had purchased a house and:

  • Paid the suburb’s median house price at the time,
  • Borrowed 90% of the purchase price, and
  • Taken out a 3-year fixed loan at 3.84% (the average 3-year rate at the time).

The next step involved calculations for June 2022:

  • How much the owner’s houses would be worth,
  • How much estimated equity they would have in their house,
  • What their estimated outstanding loan balance would be,
  • What their monthly repayment would be if their 3-year fixed loan had reverted to a variable rate of 4.75%,
  • How much they could save if they refinanced to a variable rate of 4.00%, and
  • How much they could save if they refinanced to a variable rate of 3.00%.

The final step was to rank suburbs based on how many local houses were mortgaged.

Reduce Home Loans manager Josh Beitz said the research is timely given many borrowers have either recently come to the end of a two or three year fixed loan term, or will do so shortly.

“Some borrowers who have reverted, or will soon revert, from a fixed to a variable loan might find themselves on a higher interest rate, which, of course, would be concerning. It’s important for those borrowers that can afford the rollover rate not to be complacent. That’s because the Reserve Bank is likely to keep increasing the cash rate, which will translate into much higher mortgage rates,” said Mr Beitz.

“Lenders always assess borrowers at higher interest rates, so as rates keep increasing,
people’s borrowing power will be reduced. As a result, many borrowers will be locked out of refinancing.

“The interest rate gap between higher-rate and lower-rate loans is already large, and is likely to keep growing as interest rates keep increasing. So refinancing now could potentially add up to a saving of tens of thousands or even hundreds of thousands of dollars over the life of the loan. More importantly, it might make the difference to some people being able to keep their home or being forced to sell it in a depressed market.

“All the suburbs on this ranking are showing life-of-loan savings of at least $69,000. That’s based on the assumption that borrowers have 27 years left on their mortgage and would be refinancing from an interest rate of 4.75% to 3.00%. It goes to show how powerful refinancing can be.”

The full list

Rank State Suburb Postcode Total savings by refinancing* Houses with a mortgage
1 VIC Point Cook 3030 $175,501 11,754
2 VIC Craigieburn 3064 $152,101 11,201
3 VIC Tarneit 3029 $152,101 9,597
4 VIC Berwick 3806 $188,591 8,267
5 WA Baldivis 6171 $98,469 7,808
6 VIC Sunbury 3429 $144,075 7,134
7 NSW Kellyville 2155 $295,560 7,096
8 VIC Werribee 3030 $143,266 6,896
9 NSW Dubbo 2830 $98,405 6,613
10 VIC Truganina 3029 $154,011 6,509
11 VIC Clyde North 3978 $157,910 6,394
12 WA Canning Vale 6155 $144,306 6,236
13 VIC Melbourne 3000 $69,031 6,135
14 VIC Doreen 3754 $158,938 6,107
15 VIC Narre Warren South 3805 $174,359 5,994
16 NSW Orange 2800 $110,922 5,860
17 VIC Hoppers Crossing 3029 $148,041 5,783
18 VIC Rowville 3178 $206,180 5,523
19 NSW Castle Hill 2154 $361,427 5,464
20 VIC Wyndham Vale 3024 $130,133 5,387

Source: Reduce Home Loans.

* Assumes borrowers have 27 years left on their mortgage and are refinancing from a 4.75% loan to a 3.00% loan.

The detailed list

Point Cook

Indicator Result
Houses with a mortgage – 2016 (Census) 11,754
Median house price – June 2019 $653,691
Median house price – June 2022 $735,000
Starting mortgage (90% LVR) – June 2019 $588,322
Outstanding mortgage – June 2022 $555,102
LVR – June 2022 74%
Equity – June 2022 26%
Monthly repayment @ 4.75% – June 2022 $3,044
Monthly repayment @ 4.00% – June 2022 $2,804
Monthly repayment @ 3.00% – June 2022 $2,502
Refinancing from 4.75% to 4.00% – savings per month $239
Refinancing from 4.75% to 4.00% – savings over 27 years $77,467
Refinancing from 4.75% to 3.00% – savings per month $542
Refinancing from 4.75% to 3.00% – savings over 27 years $175,501

Craigieburn

Indicator Result
Houses with a mortgage – 2016 (Census) 11,201
Median house price – June 2019 $527,820
Median house price – June 2022 $650,000
Starting mortgage (90% LVR) – June 2019 $475,038
Outstanding mortgage – June 2022 $481,089
LVR – June 2022 68%
Equity – June 2022 32%
Monthly repayment @ 4.75% – June 2022 $2,638
Monthly repayment @ 4.00% – June 2022 $2,430
Monthly repayment @ 3.00% – June 2022 $2,168
Refinancing from 4.75% to 4.00% – savings per month $207
Refinancing from 4.75% to 4.00% – savings over 27 years $67,138
Refinancing from 4.75% to 3.00% – savings per month $469
Refinancing from 4.75% to 3.00% – savings over 27 years $152,101

Tarneit

Indicator Result
Houses with a mortgage – 2016 (Census) 9,597
Median house price – June 2019 $566,532
Median house price – June 2022 $637,000
Starting mortgage (90% LVR) – June 2019 $509,879
Outstanding mortgage – June 2022 $481,089
LVR – June 2022 74%
Equity – June 2022 26%
Monthly repayment @ 4.75% – June 2022 $2,638
Monthly repayment @ 4.00% – June 2022 $2,430
Monthly repayment @ 3.00% – June 2022 $2,168
Refinancing from 4.75% to 4.00% – savings per month $207
Refinancing from 4.75% to 4.00% – savings over 27 years $67,138
Refinancing from 4.75% to 3.00% – savings per month $469
Refinancing from 4.75% to 3.00% – savings over 27 years $152,101

Berwick

Indicator Result
Houses with a mortgage – 2016 (Census) 8,267
Median house price – June 2019 $702,450
Median house price – June 2022 $892,000
Starting mortgage (90% LVR) – June 2019 $632,205
Outstanding mortgage – June 2022 $596,507
LVR – June 2022 66%
Equity – June 2022 34%
Monthly repayment @ 4.75% – June 2022 $3,271
Monthly repayment @ 4.00% – June 2022 $3,014
Monthly repayment @ 3.00% – June 2022 $2,688
Refinancing from 4.75% to 4.00% – savings per month $257
Refinancing from 4.75% to 4.00% – savings over 27 years $83,245
Refinancing from 4.75% to 3.00% – savings per month $582
Refinancing from 4.75% to 3.00% – savings over 27 years $188,591

Baldivis

Indicator Result
Houses with a mortgage – 2016 (Census) 7,808
Median house price – June 2019 $366,769
Median house price – June 2022 $440,000
Starting mortgage (90% LVR) – June 2019 $330,092
Outstanding mortgage – June 2022 $311,453
LVR – June 2022 69%
Equity – June 2022 31%
Monthly repayment @ 4.75% – June 2022 $1,708
Monthly repayment @ 4.00% – June 2022 $1,573
Monthly repayment @ 3.00% – June 2022 $1,404
Refinancing from 4.75% to 4.00% – savings per month $134
Refinancing from 4.75% to 4.00% – savings over 27 years $43,465
Refinancing from 4.75% to 3.00% – savings per month $304
Refinancing from 4.75% to 3.00% – savings over 27 years $98,469

Sunbury

Indicator Result
Houses with a mortgage – 2016 (Census) 7,134
Median house price – June 2019 $536,639
Median house price – June 2022 $655,000
Starting mortgage (90% LVR) – June 2019 $482,975
Outstanding mortgage – June 2022 $455,704
LVR – June 2022 68%
Equity – June 2022 32%
Monthly repayment @ 4.75% – June 2022 $2,499
Monthly repayment @ 4.00% – June 2022 $2,302
Monthly repayment @ 3.00% – June 2022 $2,054
Refinancing from 4.75% to 4.00% – savings per month $196
Refinancing from 4.75% to 4.00% – savings over 27 years $63,596
Refinancing from 4.75% to 3.00% – savings per month $445
Refinancing from 4.75% to 3.00% – savings over 27 years $144,075

Kellyville

Indicator Result
Houses with a mortgage – 2016 (Census) 7,096
Median house price – June 2019 $1,100,877
Median house price – June 2022 $1,750,000
Starting mortgage (90% LVR) – June 2019 $990,789
Outstanding mortgage – June 2022 $934,844
LVR – June 2022 52%
Equity – June 2022 48%
Monthly repayment @ 4.75% – June 2022 $5,126
Monthly repayment @ 4.00% – June 2022 $4,723
Monthly repayment @ 3.00% – June 2022 $4,213
Refinancing from 4.75% to 4.00% – savings per month $403
Refinancing from 4.75% to 4.00% – savings over 27 years $130,462
Refinancing from 4.75% to 3.00% – savings per month $912
Refinancing from 4.75% to 3.00% – savings over 27 years $295,560

Werribee

Indicator Result
Houses with a mortgage – 2016 (Census) 6,896
Median house price – June 2019 $533,625
Median house price – June 2022 $600,000
Starting mortgage (90% LVR) – June 2019 $480,263
Outstanding mortgage – June 2022 $453,145
LVR – June 2022 74%
Equity – June 2022 26%
Monthly repayment @ 4.75% – June 2022 $2,485
Monthly repayment @ 4.00% – June 2022 $2,289
Monthly repayment @ 3.00% – June 2022 $2,042
Refinancing from 4.75% to 4.00% – savings per month $195
Refinancing from 4.75% to 4.00% – savings over 27 years $63,238
Refinancing from 4.75% to 3.00% – savings per month $442
Refinancing from 4.75% to 3.00% – savings over 27 years $143,266

Dubbo

Indicator Result
Houses with a mortgage – 2016 (Census) 6,613
Median house price – June 2019 $366,532
Median house price – June 2022 $505,000
Starting mortgage (90% LVR) – June 2019 $329,879
Outstanding mortgage – June 2022 $311,252
LVR – June 2022 60%
Equity – June 2022 40%
Monthly repayment @ 4.75% – June 2022 $1,707
Monthly repayment @ 4.00% – June 2022 $1,572
Monthly repayment @ 3.00% – June 2022 $1,403
Refinancing from 4.75% to 4.00% – savings per month $134
Refinancing from 4.75% to 4.00% – savings over 27 years $43,437
Refinancing from 4.75% to 3.00% – savings per month $304
Refinancing from 4.75% to 3.00% – savings over 27 years $98,405

Truganina

Indicator Result
Houses with a mortgage – 2016 (Census) 6,509
Median house price – June 2019 $573,647
Median house price – June 2022 $645,000
Starting mortgage (90% LVR) – June 2019 $516,282
Outstanding mortgage – June 2022 $487,130
LVR – June 2022 74%
Equity – June 2022 26%
Monthly repayment @ 4.75% – June 2022 $2,671
Monthly repayment @ 4.00% – June 2022 $2,461
Monthly repayment @ 3.00% – June 2022 $2,195
Refinancing from 4.75% to 4.00% – savings per month $210
Refinancing from 4.75% to 4.00% – savings over 27 years $67,981
Refinancing from 4.75% to 3.00% – savings per month $475
Refinancing from 4.75% to 3.00% – savings over 27 years $154,011

Clyde North

Indicator Result
Houses with a mortgage – 2016 (Census) 6,394
Median house price – June 2019 $588,169
Median house price – June 2022 $720,000
Starting mortgage (90% LVR) – June 2019 $529,352
Outstanding mortgage – June 2022 $499,462
LVR – June 2022 68%
Equity – June 2022 32%
Monthly repayment @ 4.75% – June 2022 $2,738
Monthly repayment @ 4.00% – June 2022 $2,523
Monthly repayment @ 3.00% – June 2022 $2,251
Refinancing from 4.75% to 4.00% – savings per month $215
Refinancing from 4.75% to 4.00% – savings over 27 years $69,702
Refinancing from 4.75% to 3.00% – savings per month $487
Refinancing from 4.75% to 3.00% – savings over 27 years $157,910

Canning Vale

Indicator Result
Houses with a mortgage – 2016 (Census) 6,236
Median house price – June 2019 $537,500
Median house price – June 2022 $645,000
Starting mortgage (90% LVR) – June 2019 $483,750
Outstanding mortgage – June 2022 $456,435
LVR – June 2022 69%
Equity – June 2022 31%
Monthly repayment @ 4.75% – June 2022 $2,503
Monthly repayment @ 4.00% – June 2022 $2,306
Monthly repayment @ 3.00% – June 2022 $2,057
Refinancing from 4.75% to 4.00% – savings per month $197
Refinancing from 4.75% to 4.00% – savings over 27 years $63,698
Refinancing from 4.75% to 3.00% – savings per month $445
Refinancing from 4.75% to 3.00% – savings over 27 years $144,306

Melbourne

Indicator Result
Houses with a mortgage – 2016 (Census) 6,135
Median house price – June 2019 $257,123
Median house price – June 2022 $395,000
Starting mortgage (90% LVR) – June 2019 $231,410
Outstanding mortgage – June 2022 $218,343
LVR – June 2022 54%
Equity – June 2022 46%
Monthly repayment @ 4.75% – June 2022 $1,197
Monthly repayment @ 4.00% – June 2022 $1,103
Monthly repayment @ 3.00% – June 2022 $984
Refinancing from 4.75% to 4.00% – savings per month $94
Refinancing from 4.75% to 4.00% – savings over 27 years $30,471
Refinancing from 4.75% to 3.00% – savings per month $213
Refinancing from 4.75% to 3.00% – savings over 27 years $69,031

Doreen

Indicator Result
Houses with a mortgage – 2016 (Census) 6,107
Median house price – June 2019 $592,000
Median house price – June 2022 $740,000
Starting mortgage (90% LVR) – June 2019 $532,800
Outstanding mortgage – June 2022 $502,715
LVR – June 2022 67%
Equity – June 2022 33%
Monthly repayment @ 4.75% – June 2022 $2,756
Monthly repayment @ 4.00% – June 2022 $2,540
Monthly repayment @ 3.00% – June 2022 $2,266
Refinancing from 4.75% to 4.00% – savings per month $217
Refinancing from 4.75% to 4.00% – savings over 27 years $70,156
Refinancing from 4.75% to 3.00% – savings per month $491
Refinancing from 4.75% to 3.00% – savings over 27 years $158,938

Narre Warren South

Indicator Result
Houses with a mortgage – 2016 (Census) 5,994
Median house price – June 2019 $649,437
Median house price – June 2022 $795,000
Starting mortgage (90% LVR) – June 2019 $584,493
Outstanding mortgage – June 2022 $551,489
LVR – June 2022 68%
Equity – June 2022 32%
Monthly repayment @ 4.75% – June 2022 $3,024
Monthly repayment @ 4.00% – June 2022 $2,786
Monthly repayment @ 3.00% – June 2022 $2,486
Refinancing from 4.75% to 4.00% – savings per month $238
Refinancing from 4.75% to 4.00% – savings over 27 years $76,963
Refinancing from 4.75% to 3.00% – savings per month $538
Refinancing from 4.75% to 3.00% – savings over 27 years $174,359

Orange

Indicator Result
Houses with a mortgage – 2016 (Census) 5,860
Median house price – June 2019 $413,154
Median house price – June 2022 $655,000
Starting mortgage (90% LVR) – June 2019 $371,838
Outstanding mortgage – June 2022 $350,842
LVR – June 2022 52%
Equity – June 2022 48%
Monthly repayment @ 4.75% – June 2022 $1,924
Monthly repayment @ 4.00% – June 2022 $1,772
Monthly repayment @ 3.00% – June 2022 $1,581
Refinancing from 4.75% to 4.00% – savings per month $151
Refinancing from 4.75% to 4.00% – savings over 27 years $48,962
Refinancing from 4.75% to 3.00% – savings per month $342
Refinancing from 4.75% to 3.00% – savings over 27 years $110,922

Hoppers Crossing

Indicator Result
Houses with a mortgage – 2016 (Census) 5,783
Median house price – June 2019 $551,413
Median house price – June 2022 $620,000
Starting mortgage (90% LVR) – June 2019 $496,271
Outstanding mortgage – June 2022 $468,249
LVR – June 2022 74%
Equity – June 2022 26%
Monthly repayment @ 4.75% – June 2022 $2,567
Monthly repayment @ 4.00% – June 2022 $2,366
Monthly repayment @ 3.00% – June 2022 $2,110
Refinancing from 4.75% to 4.00% – savings per month $202
Refinancing from 4.75% to 4.00% – savings over 27 years $65,346
Refinancing from 4.75% to 3.00% – savings per month $457
Refinancing from 4.75% to 3.00% – savings over 27 years $148,041

Rowville

Indicator Result
Houses with a mortgage – 2016 (Census) 5,523
Median house price – June 2019 $767,963
Median house price – June 2022 $1,102,000
Starting mortgage (90% LVR) – June 2019 $691,167
Outstanding mortgage – June 2022 $652,140
LVR – June 2022 58%
Equity – June 2022 42%
Monthly repayment @ 4.75% – June 2022 $3,576
Monthly repayment @ 4.00% – June 2022 $3,295
Monthly repayment @ 3.00% – June 2022 $2,939
Refinancing from 4.75% to 4.00% – savings per month $281
Refinancing from 4.75% to 4.00% – savings over 27 years $91,009
Refinancing from 4.75% to 3.00% – savings per month $636
Refinancing from 4.75% to 3.00% – savings over 27 years $206,180

Castle Hill

Indicator Result
Houses with a mortgage – 2016 (Census) 5,464
Median house price – June 2019 $1,346,216
Median house price – June 2022 $2,140,000
Starting mortgage (90% LVR) – June 2019 $1,211,594
Outstanding mortgage – June 2022 $1,143,181
LVR – June 2022 52%
Equity – June 2022 48%
Monthly repayment @ 4.75% – June 2022 $6,268
Monthly repayment @ 4.00% – June 2022 $5,775
Monthly repayment @ 3.00% – June 2022 $5,152
Refinancing from 4.75% to 4.00% – savings per month $492
Refinancing from 4.75% to 4.00% – savings over 27 years $159,536
Refinancing from 4.75% to 3.00% – savings per month $1,116
Refinancing from 4.75% to 3.00% – savings over 27 years $361,427

Wyndham Vale

Indicator Result
Houses with a mortgage – 2016 (Census) 5,387
Median house price – June 2019 $484,709
Median house price – June 2022 $545,000
Starting mortgage (90% LVR) – June 2019 $436,238
Outstanding mortgage – June 2022 $411,606
LVR – June 2022 74%
Equity – June 2022 26%
Monthly repayment @ 4.75% – June 2022 $2,257
Monthly repayment @ 4.00% – June 2022 $2,079
Monthly repayment @ 3.00% – June 2022 $1,855
Refinancing from 4.75% to 4.00% – savings per month $177
Refinancing from 4.75% to 4.00% – savings over 27 years $57,442
Refinancing from 4.75% to 3.00% – savings per month $402
Refinancing from 4.75% to 3.00% – savings over 27 years $130,133

~~

Disclaimer: This article contains general information and should at no time be considered advice to the reader. The reader should always verify their situation with the relevant certified professionals before taking any further steps. 

You May Also Like

End of week ASX wrap: 12 August 2022

The ASX200 closed today at 7,032.50 points, down 38.50 points or 0.54%. Since Monday, the market is up 10.7 points or 0.2%.

Newmark Property REIT (ASX: NPR) announces FY22 results

Nemark Property REIT listed on the ASX in December 2021, with the company announcing over $50M in statutory net profit

Barings to acquire Altis Property Partners

The Australian real estate firm manages about $6 billion in assets, with all 44 staff moving to the new transaction as part of the deal

Mirvac (ASX: MGR) announces FY22 results

Mirvac has announced a $5 million increase in its statutory profit, and an 8% increase in its operating profit after tax