The RBA publishes a data series most borrowers have never heard of, its housing lending rates table (F6). It tracks the average rate paid on outstanding variable owner-occupier loans against the average on new loans funded each month. The gap between the two is the usual measure of the loyalty tax, and it reached 0.50 percentage points at the end of 2022. It has since all but closed. In April 2026, outstanding variable owner-occupier loans averaged 6.00 per cent and new ones 5.99 per cent, after two years of refinancing competition pushed banks to reprice the customers they already had.
That does not mean your own rate is fine. An average across millions of loans hides a wide spread, and the borrowers who reprice regularly pull it down for everyone who does not. When you took your loan, the bank gave you a discount off its standard variable rate to win the business. If you have not asked since, your discount may not have kept up with what the bank now offers new customers, and the three rate rises of 2026 were passed on to you in full. The only way to know is to compare your rate with your bank's current new-customer rate for the same product.
What a gap costs at real loan sizes
- $400,000 loan: each 0.25 percentage points is about $1,000 a year.
- $600,000 loan: about $1,500 a year for each 0.25 points.
- $750,000 loan: about $1,875 a year for each 0.25 points.
- $1,000,000 loan: about $2,500 a year for each 0.25 points.
Those are simple interest figures, before any offset balance. A borrower who sits 0.50 points above their bank's new-customer rate pays twice those amounts, and on a $700,000 loan that is $3,500 a year.
The 15-minute phone call
Every Big 4 bank and most mid-tier lenders run a retention team whose entire job is stopping discharges. Retention teams usually have more pricing room than front-line staff, and can often apply it without a new application or credit check. The script that gets you there:
- Look up your current rate in your banking app before you call. Most borrowers do not know it, and the call goes differently when you open with the number.
- Find two comparison points: your own bank's advertised new-customer rate for your product and LVR, and one sharp external rate for the same loan from a comparison site or a broker.
- Call and ask for the mortgage retention or "home loan review" team, not the general line. Say the words "I am considering refinancing and I would like a rate review before I lodge the discharge form."
- Ask for the specific gap to be closed: "Your new-customer rate for my exact product is 5.95. I am on 6.45. What can you do?"
- If the first offer is 10 basis points, say it is not enough and ask for it to be escalated to pricing. The second offer is usually better. The discharge form mention is what unlocks the retention matrix.
Success rate on this call is high. The banks do not publish it, but broker-side experience is that a clean file with an LVR under 80 per cent gets meaningful repricing in well over half of attempts, same week, no paperwork beyond a confirmation letter.
When to stop calling and refinance
The phone call has a ceiling. The bank will close some of the gap to its own front book; it will not match the sharpest external lender, because its funding costs will not let it. The decision rule we would use: if the rate you hold after a genuine retention offer is still more than 25 basis points above what a broker can place you into externally, and your file is clean, run the refinance maths. At 25 basis points on $600,000 you are leaving $1,500 a year on the table; switching costs of roughly $700 to $1,100 in government and discharge fees pay back inside the first year.
Two cautions before you lodge anything. First, check any cashback you took recently; many lenders claw back a refinance cashback if you leave within a set period, and the claw-back can exceed the first-year saving. We covered the claw-back small print in detail last week. Second, if your property is in Sydney or Melbourne, get the valuation question answered early; values there have been falling, and a refinance that pencils at 78 per cent LVR on your purchase price can come back over 80 on the new bank's valuation. More on that in a separate piece this week.
Disclosure: Licensed brokers who meet our criteria pay Your Finance Guide a partnership fee to receive enquiries from this site. The fee is paid by the broker, not by you, and is not added to your loan. Brokers are usually also paid a commission by the lender when a refinance proceeds. A retention repricing at your existing bank pays a broker nothing, and a good broker will still tell you to take it when it is the right outcome. The RBA figures quoted are from the publicly available Lenders' Interest Rates statistical tables.