Here’s a fun fact for you.
The last time the Reserve Bank of Australia (RBA) raised the official cash rate was more than a decade ago. Tuesday 3 November 2010, to be precise – when the cash rate was bumped up by 25 basis points to 4.75%.

Back then, you could buy a house in Sydney for around $620,000, according to the Australian Bureau of Statistics. But, after the median value leapt by an astonishing 127.4% In the 10.5 years to June 2021, you’re now looking at spending over $1.4 million.

While property prices might have gone through the roof, the cost of borrowing has never been so low – thanks to the RBA’s decision to slash the cash rate in November 2020 to 0.10% in response to the pandemic.

As a result, home loan interest rates are at record lows.

What’s more, there’s a good chance they will stay there for some time yet. That’s because RBA governor, Philip Lowe, has repeatedly gone on the record to say the central bank “will not increase the cash rate until actual inflation is sustainably within the 2% to 3% target range”.

The RBA does not expect that to happen until 2024 “at the earliest”.

Ultra-low interest rates drive record refinancing

Unsurprisingly, the lure of rock-bottom rates is driving record refinancing rates. The most recent figures from the Australian Bureau of Statistics (ABS) show the value of refinanced home loans reached an all-time high of $17.2 billion in July 2021, after rising by 6% over the month.

When compared to a year ago, the value of refinancing between lenders was 60% higher.

“This reflected borrowers seeking out lower interest rates, particularly for fixed-rate loans, and cashback deals across a large number of major and non-major lenders,” according to ABS head of finance and wealth Katherine Keenan.

Or to put it another way, lenders are competing hard for your business … so there’s never been a better time to shop around for a better deal on your mortgage.