Refinancing Slows, But the Savings Gap Remains Wide
National refinancing activity pulled back marginally in the March quarter, according to the latest ABS Lending Indicators. But for Melbourne borrowers still on an unrevisited mortgage from five or more years ago, the underlying numbers tell a different story. The gap between what many are paying and what competitive rates currently offer remains one of the more significant personal finance considerations of the current lending environment.
What the ABS Data Shows
According to the ABS Lending Indicators for the March quarter 2026, the total value of refinanced loans fell 0.2% in seasonally adjusted terms to $68.2 billion — a modest easing from the December quarter peak. One notable movement within that figure was internal refinancing among investors, where borrowers switched products with their existing lender rather than moving elsewhere. That segment rose 3.3% in volume and 30.3% year-on-year, with the value of those loans up 41.2% annually. This suggests some borrowers are actively seeking better terms without necessarily changing lenders.
The Cost of a Set-and-Forget Mortgage
Canstar data illustrates how much an unchanged mortgage can cost over time. A borrower who took out a $600,000 loan five years ago and hasn't renegotiated may now be sitting on a variable rate of around 7.01% following the May rate adjustment. By comparison, a competitive rate of 5.99% on the same balance could represent savings of over $11,000 across two years — even after accounting for estimated switching costs of approximately $1,150. These are general illustrations based on published data and individual circumstances will vary significantly.
What This Means for Victorian Borrowers
For those in Melbourne and Victoria, reviewing an existing loan periodically is a straightforward piece of financial housekeeping, regardless of what broader market conditions are doing. A modest dip in refinancing volumes nationally doesn't mean the opportunity to improve your position has passed — it simply reflects shifting activity patterns across a large market. If you haven't looked at your mortgage rate or loan structure recently, the data suggests it may be worth doing so. Speaking with a broker can help you understand your current position relative to what's available, without any obligation to act.