Maximising the RBA February rate cut: Mozo

After the RBA dropped the official cash rate to 2.25%, at the first Tuesday board meeting of 2015, smart borrowers could now possibly more than triple their rate cut by refinancing.

Mozo, the comparison website, gave the scenario using a $500,000 home loan over 25 years of dropping the variable home loan from 5.25% to 5%, where typically monthly home loan repayments would be reduced by just $73.

By comparison, Mozo suggests that if borrowers switched to their Mystery Bank offer at 4.34% (4.37% comparison rate), then the monthly home loan repayments would be reduced by $262.

Mozo suggest that means around $78,600 saved over the life of the loan.

It urged borrowers to refinance by comparing the home loan market especially because lenders are aggressively pricing.

They gave an example last year looking for a $500,000 home loan, where 1.16% off the standard variable rate loan was secured, by mentioning lower rates from other providers.