Key takeaways
A rate review, refinancing, an offset account or lower fees may help make your mortgage repayments more manageable.
Interest-only repayments and a longer loan term may lower the amount you pay each month but can increase total interest.
The RBA cash-rate target is 4.85% after its November 2026 decision. Your lender sets your home loan rate.
If you’re finding repayments difficult, contact your lender’s hardship team early and ask about a hardship variation.
When repayments go up, it’s natural to look for some room in the household budget. A bigger repayment can affect the rest of your budget, from everyday bills to plans you’ve been working towards.
You don’t need to make a big decision straight away. The RBA increased the cash-rate target to 4.85% on 3 November 2026, but the cash rate isn’t the same as your home loan rate.
Lenders set their own rates and timing, so variable repayments may not change by the same amount or at the same time.
If you’re not sure where to start, you don’t need to work everything out at once. Check your current rate, balance, remaining term, fees and features first.
A rate review or refinance may reduce repayments and total interest. An offset account or extra repayments may reduce interest, even if your scheduled repayment stays the same.
Some options are about lowering what you pay now. Others are about reducing what the loan costs over time.
Interest-only repayments and extending your loan term can create some breathing room but may increase the total interest you pay.
You don’t need to choose every option. A sensible next step may be the one that gives your budget some room without creating a bigger problem later. If the pressure is immediate, skip ahead to the hardship support section.
Nicholas Herry, Aussie Mobile Broker in Victoria, said “I think the most important thing for customers to understand is that we need to focus on what we can control."
"There will always be external factors that influence interest rates, and those decisions are outside of any individual’s control. Instead, I encourage customers to take a closer look at their own situation and identify the levers they can pull," he added.
6 ways to reduce your mortgage repayments
1. Ask your lender for a lower rate
Start with your current lender. If you haven’t checked your rate for a while, ask for a review and have your rate, balance, repayment history and loan features ready. Reviewing your loan doesn’t necessarily mean changing lenders.
Your loan-to-value ratio (LVR) may also have changed. LVR compares what you owe with the lender-assessed value of your property. Ask whether this affects the rate available to you.
“I’m seeing more borrowers asking the right questions of their current lender. The most common one is, ‘Am I on the most competitive rate available?’ If the answer is no, the next question becomes, ‘What can we do to reduce it?’” Nicholas said.
The RBA’s 2020 analysis found that older variable-rate loans typically carried higher rates than newer loans for borrowers with similar characteristics.
Some borrowers negotiated a larger discount without refinancing. This is older analysis, not a guarantee about your loan today.
Why it helps: A lower rate may reduce your repayment and total interest.
Watch out: A rate review may not lead to a lower rate. Ask how any change affects your repayment, total interest, fees, and features.
On a $600,000 principal-and-interest loan over 25 years, reducing the rate from 6.40% to 5.90% would reduce the monthly repayment by about $185 and total interest by more than $55,000, assuming the rate stays unchanged and fees are excluded.
You can calculate your repayments or read how to negotiate a better rate.
2. Refinance to a more competitive loan
Not sure whether refinancing is the right move? Start by asking your current lender what it can do. If the answer doesn’t work for you, compare a new loan carefully before switching.
Look at the rate, comparison rate, fees, features, and total cost. A comparison rate includes the interest rate and most standard fees and charges, but it won’t show every cost or take your circumstances into account.
As you compare, check:
your current rate, balance, remaining term, fees and features
the new rate, comparison rate, fees, offset and redraw access, and extra-repayment rules
discharge, application and other switching costs, including fixed-rate break costs where applicable
whether the new repayment would still fit your budget.
You’ll need to apply, and approval is subject to lender assessment. Refinancing often takes several weeks, but timing varies by lender.
Why it helps: Another loan may offer a lower rate or a structure that better suits your circumstances.
Watch out: A lower repayment doesn’t automatically mean a lower total cost. A longer term, fees or a higher comparison rate may outweigh a lower advertised rate. Read when refinancing makes sense before deciding.
3. Use an offset account
If you already have an offset account, it may help make your savings work harder against your home loan.
Money in it is generally offset against the balance used to calculate interest. With a $500,000 loan and $20,000 in a full offset account, interest may be calculated on $480,000, subject to your loan terms.
Why it helps: An offset may reduce interest and help you pay off your loan sooner without changing your scheduled repayment.
Watch out: It usually reduces interest rather than the repayment, unless your lender recalculates the minimum. Check whether it’s full or partial and compare fees with the potential benefit.
A redraw facility may also let you access eligible extra repayments. Access, limits and fees depend on your lender and loan terms, so check the rules before relying on it as an emergency buffer.
4. Make extra repayments, then ask about a lower repayment
If your budget allows, extra repayments can reduce the principal and interest charged over time.
You could make regular additional payments, round up repayments, or use a lump sum. Don’t stretch your budget to do this, and check the rules, particularly if your loan is fixed.
Why it helps: Paying ahead may reduce your balance and shorten your loan term.
Watch out: Your minimum repayment may not fall automatically. Ask whether your lender recalculates it when you’ve paid ahead. This varies by lender, and a lower repayment may mean paying the loan off more slowly.
Try the extra repayments calculator.
5. Consider a short interest-only period
An interest-only period may help when repayment pressure is temporary, such as during parental leave or reduced hours. I
It covers the interest for an agreed period without reducing the principal, so it needs a plan for what happens next.
Why it helps: The repayment can be lower because you aren’t paying principal at the same time.
Watch out: The balance doesn’t reduce, repayments usually rise when principal-and-interest repayments resume, and total interest can be higher.
Repayment type | Approx. Monthly repayment | What happens |
|---|---|---|
Principal and interest over 30 years | $3,694 | Baseline repayment |
Interest-only for 2 years | $3,125 | About $569 lower each month during the interest-only period |
Principal and interest for the remaining 28 years | $3,786 | About $92 higher each month than the original repayment |
Before changing repayment type, check the applicable rate, availability, and repayment afterwards.
If a fixed or introductory rate ends, check the revert rate, which applies after the initial period, and plan for it.
6. Cut fees with a lower-fee loan
Fees are easy to overlook, so review your package, annual and account fees. A lower-fee loan may reduce costs if it keeps features you use, such as offset or redraw.
Why it helps: Removing a fee can reduce loan costs.
Watch out: Fewer fees may mean a higher rate or fewer features. Compare total cost before switching.
Other ways to ease repayments, and what they cost
Extend your loan term carefully
If you need lower repayments to get through a difficult period, extending the term may help spread the balance across more repayments.
You may pay interest for longer, though, so consider it alongside your longer-term plans.
Remaining term | Approx. monthly repayment | Total interest at 6.25% |
|---|---|---|
20 years | $3,655 | $377,000 |
30 years | $3,079 | $608,000 |
Why it helps: It may create room in your budget.
Watch out: The lower repayment can mean a much higher total interest bill. Ask whether you could shorten the term again later.
Consolidate high-interest debts into your home loan
If several repayments are becoming difficult to keep track of, rolling credit cards or personal debts into your home loan may make things simpler.
But the debt becomes secured against your home, and a longer term can increase the total cost.
Before consolidating, compare the old and new total costs and check the new repayment remains affordable if rates or living costs rise. See if consolidating could make repayments easier to manage.
Struggling to keep up with repayments?
If you’re already worrying about whether you can make the next repayment, contact your lender’s hardship team early.
You can ask about a hardship variation, which changes your loan terms because of financial hardship.
Depending on your circumstances, this may involve changing the term or temporarily reducing or pausing repayments.
Tell your lender what’s changed, how long you expect the difficulty to last, and what you can afford to pay.
You don’t have to face it alone. The National Debt Helpline offers free, confidential financial counselling on 1800 007 007 and can help you understand your options.
What to consider before changing your loan
Before changing your loan, check:
the new repayment and total interest over the remaining term
application, discharge, valuation, legal, package and other fees
fixed-rate break costs or repayment restrictions, including fixed-rate home loans
whether you’ll keep an emergency buffer and useful features such as offset or redraw
whether the repayment would remain manageable if your income or living costs changed.
It may also help to follow the latest RBA rates decision, without assuming it will move your loan rate by a particular amount.
How an Aussie Broker can help
You don’t have to work it out alone. An Aussie Broker can review your rate and loan structure, compare options across Aussie’s lender panel, and explain the total cost as well as the repayment.
Afrin Khan, Aussie Mobile Broker in South Australia, said “I’m finding that clients are more interested in reviewing their existing loans and exploring ways to make repayments more manageable."
"This includes reviewing their interest rates, considering refinancing options and looking at whether a different loan structure could better suit their circumstances," she added.
They can talk through refinancing, a different term or another loan feature, subject to lender assessment and approval.
Chat with an Aussie Broker to review your options.
