More Australian homeowners are choosing to stay put and refinance with their existing bank, with internal refinancing reaching a record high, according to new analysis from Money.com.au.
Based on ABS data, internal refinances accounted for 35% of all home loan refinances in the year to March 2025 – the highest share since the ABS began tracking this figure in September 2020. That’s well above the four-year average of 30%.
In raw numbers, that translates to 194,898 internal refinances out of 554,820 total refinance transactions, with the remaining 65% involving borrowers switching lenders.
Jacob Overs (pictured), general manager of lending at Money.com.au, said lenders are sharpening retention tactics – and brokers can use that to their advantage.
“Sending a discharge form to your bank is like pulling the pin – it tells your bank you’re serious about leaving, and they’ll often come back with surprisingly aggressive retention offers, sometimes even better than what they’re offering new customers,” Overs said.
“If you play hardball and formally start the loan discharge process, your lender is far more motivated to offer their best rate than if you simply ask for a reprice.”
For brokers, this means knowing when to push the discharge button can be a powerful negotiation tool – especially if it gives clients access to unadvertised rate tiers or retention offers.
Overs noted that for some borrowers, sticking with the same lender may be the best move, particularly when competitive pricing is offered without switching costs.
“For some borrowers, it can make sense to stay with their current lender if they’re offered a competitive rate, especially if you could avoid refinancing fees, which can run into the hundreds, and the hassle of switching accounts and direct debits,” he said.
For brokers, the message is clear: don’t dismiss internal refinances – they can be the best-fit option for the right client.
Overs outlined three scenarios where brokers can help clients get sharper pricing without switching lenders.
Lower LVR strengthens client profile
Borrowers who’ve reduced their loan amount relative to their property’s value may now qualify as lower-risk clients. That shift could make them eligible for a better rate.
“If you’ve built up a good repayment history, your loan amount as a percentage of your property’s value (known as your loan-to-value ratio or LVR) will likely be lower than when you first took out your mortgage. As a result, you’ll be considered a lower-risk borrower – which means you’d qualify for a lower interest rate from your lender,” Overs said.
Smaller loans (under $150,000) may be less likely to trigger strong retention efforts – something brokers should factor into strategy.
Discharge forms unlock better offers
“Lenders are more willing to cut deals to keep existing customers from leaving,” Overs said.
“Your lender may also have internal rate tiers or retention offers that aren’t publicly advertised... These are often only triggered when you submit a discharge form or are transferred to a retention team.”
Brokers can use this to surface competitive pricing not available on rate cards.
Multiple loans = more leverage
“If you have multiple loans with the same lender like a home loan and an investment property loan, you may be in a stronger position to negotiate a better rate with your lender,” Overs said.
Bundled loan clients may gain from internal repricing and avoid fees across multiple accounts, giving brokers more flexibility to retain clients profitably.
