New Year, New Loan: Why January Can Be an Ideal Time to Refinance Your Mortgage

14 January 2025

With Australians embracing New Year’s resolutions, January can also be a great time to refinance your home loan, according to mortgage experts.

Historically, January sees lower refinancing activity. Over the past five years, refinancing loans have averaged just 74% of the typical monthly loan volume recorded throughout the year, so it’s a great chance to get a better rate or loan deal while lenders are quieter but still keen for business.

Money.com.au‘s Home Loans Expert, Mansour Soltani, says January is a good time to review all life admin, including your biggest monthly expenses like your mortgage.

“It’s a time when people typically reassess their family budget, and with January traditionally being a quieter month for home lending, it’s the perfect opportunity to swoop in and negotiate a better deal while lenders are eager to attract new business,” he says.

5 reasons to refinance your mortgage in January

1.    New Year financial review

Many people include financial goals in their New Year’s resolutions, so January is a perfect time to look for ways to save on your home loan.

According to a survey by Money.com.au, 46% of Australians say their mortgage is their most stressful debt. For people in this camp, it can make sense to start the year by refinancing to reduce their repayments and ease some of that angst.

While the cash rate has remained unchanged for over a year, there have been slight movements in interest rates. Over the past 12 months, owner-occupied fixed rates (less than three years) have decreased by 35 basis points, although variable rates have seen a marginal annual increase of 0.01%.

2.    Consolidate debt after Christmas

Many households rack up credit card debt over the festive season and try to pay it off before they’re charged interest.

Over the last five years, personal card use in December increased by 11% compared to the monthly average for the rest of the year, equating to an additional 28 million transactions or

$2.3 billion above the average.

Homeowners with lingering high-interest debts may benefit from refinancing. By rolling personal loans and credit card balances into their home loan, they may be able to reduce interest costs and simplify repayments into one, more manageable loan.

3.    Faster bank turnaround times

Director of Headland Finance, Mitch Bath, says with many people still on holiday, bank volumes are lower, leading to quicker processing times.

“With fewer applications coming through during the holiday period, banks can process loans much faster than usual, provided they’re not busy settling purchases from December,” he says.

4.    Cashback incentives

Some lenders are still offering refinance cashbacks of up to $4,000 which make a welcome bonus to kickstart the year, particularly after the expensive holiday season.

“We don’t advise refinancing for the sake of a cashback if the numbers don’t stack up, but if they do, and it aligns with your financial goals, it can be a great added bonus to kick off 2025 with extra cash,” says Mitch.

5.    Capitalise on the property market while it hibernates

The property market typically experiences a downturn in December and January, with property listing volumes dropping due to the festive season.

Director of Klutch Finance Group, Todd Iljasov, says refinancing in January can position investors to take advantage of the property market surge in February and towards the end of summer.

“For investors with equity, refinancing in January can free up cashflow and reduce repayments, creating additional borrowing power. This can give you a stronger bidding position when the property market heats up again and the right opportunity comes along,” he says.