Does a Broker Help with Switching Lenders in Victoria if My Current Bank Increases Their Rate?

By Lowest Interest Rates Australia

Introduction

I still remember the day my bank sent that “friendly” letter — you know, the one that starts with, “We’re adjusting your home loan rate…” and ends with you needing a stiff coffee. ☕ I’d been with the same bank for years, loyal as ever, thinking that surely they’d look after me. Spoiler alert: they didn’t.

That small increase — 0.25%, maybe 0.5% — doesn’t sound like much on paper. But when you do the math, it can mean hundreds of dollars extra every month, and thousands over a year. That’s when it hit me: loyalty doesn’t always pay in the mortgage world.

So, I reached out to a mortgage broker — and it completely changed the way I think about home loans. If your current bank has increased your rate (again), and you’re wondering whether a broker can help you switch lenders in Victoria, this article is for you.

Let’s dive into exactly how mortgage brokers help homeowners escape rising rates, find better deals, and stay in control of their financial future — without all the stress of doing it alone.

Table of Contents

1. Why Banks Keep Increasing Home Loan Rates
2. When Should You Consider Switching Lenders?
3. How a Mortgage Broker Helps You Switch Lenders
4. Benefits of Using a Broker to Refinance
5. Step-by-Step: How Switching Lenders Works
6. Case Study: How a Melbourne Homeowner Saved Thousands
7. Are There Any Costs Involved in Switching?
8. When It Might Not Be the Right Time to Switch
9. Tips for Getting the Best Refinance Deal in Victoria
10. Final Thoughts – Work with Lowest Interest Rates

Why Banks Keep Increasing Home Loan Rates

In recent years, Australians have watched interest rates climb faster than anyone expected. Even when the Reserve Bank of Australia (RBA) holds the official cash rate steady, many banks continue to raise their variable loan rates. Why? Because they can — and because their funding costs, profit margins, and risk appetite all change over time.

For homeowners in Victoria, especially around Melbourne where property values are high, even a small rate rise can bite. On a $600,000 loan, a 0.25% increase adds roughly $100 to your monthly repayment. Over a year, that’s an extra $1,200 — and over your loan’s life, potentially tens of thousands.

Unfortunately, many borrowers stick with their existing bank simply because switching seems too complicated. That’s where a mortgage broker steps in — to make the process simple, transparent, and financially rewarding.

When Should You Consider Switching Lenders?

Here are some clear signs it’s time to review or refinance your loan:

• 💸 Your interest rate is no longer competitive — other lenders are offering better deals.
• 📈 Your bank has increased your rate without clear justification.
• 📉 You’ve built up equity in your property, giving you access to better rates (lower LVR).
• ⚙️ You’re nearing the end of a fixed-rate period and your loan is about to revert to a high variable rate.
• 🔁 You want more flexible features like an offset account or redraw facility.
• 💼 You want to consolidate other debts (credit cards, personal loans) into your home loan.

Generally, if you haven’t reviewed your mortgage in the last **12–18 months**, you’re probably paying more than you need to. A good broker will tell you that a “set and forget” approach doesn’t work anymore — not in today’s rate environment.

How a Mortgage Broker Helps You Switch Lenders

A broker is like your personal mortgage detective — they dig through the fine print, compare dozens of lenders, and find you a deal that suits your needs better than your current one. Here’s what they do for you:

1. Review Your Current Loan

First, they’ll analyse your existing loan: the rate, repayment structure, and features. They’ll check how it stacks up against what’s available in the market.

2. Compare Multiple Lenders

Brokers have access to a wide panel of lenders — often 20, 30, or more — including big banks, regional lenders, and non-bank institutions. That means they can find you options that regular customers wouldn’t even know exist.

3. Calculate Savings

Your broker will show you the real numbers — how much you can save each month and over the life of your loan. They’ll include things like cashback offers, refinancing costs, and potential savings to give you a full picture.

4. Manage the Switch

Once you decide to refinance, your broker handles the application process from start to finish — contacting lenders, submitting paperwork, and following up on approvals. You barely have to lift a finger.

5. Negotiate with Your Current Bank

Sometimes, your broker can use a better offer from another lender as leverage to get your existing bank to lower your rate. You might not even have to switch at all to save money!

Benefits of Using a Broker to Refinance

• Access to more options: Brokers have lender panels far beyond the “big four” banks.
• Expert rate negotiation: They know what rates are actually achievable for your profile.
• Time and stress savings: They handle the admin, follow-ups, and loan comparisons for you.
• Personalised advice: Brokers look at your goals (paying off faster, freeing up cash, investing) and match the best loan accordingly.
• Ongoing support: The relationship doesn’t end after settlement — a good broker reviews your rate every year.

In short: your broker is your mortgage ally, not your salesperson.

Step-by-Step: How Switching Lenders Works

1. Initial Consultation: Your broker assesses your financial situation, goals, and current loan.
2. Comparison: They shortlist lenders offering better rates and terms for you.
3. Cost-Benefit Analysis: They calculate how much you’ll save versus any switching costs.
4. Application: Your broker completes and submits the refinance paperwork.
5. Approval & Settlement: Once approved, the new lender pays out your old loan directly.
6. Follow-up: Your broker ensures everything transitions smoothly — no missed payments or penalties.

From start to finish, switching lenders through a broker usually takes around **2–4 weeks**, depending on the lender’s processing time and your documentation.

Case Study: How a Melbourne Homeowner Saved Thousands

Michael from Glen Waverley had a $650,000 home loan with his long-time bank. When rates started rising, his variable rate jumped to 6.85%. Frustrated, he contacted Lowest Interest Rates for help.

His broker compared 25 lenders and found a smaller lender offering 5.49% — plus a $3,000 cashback. After refinancing:

• Michael’s repayments dropped by **$525 per month**.
• He used the cashback to pay down his balance faster.
• He was able to split his loan (half fixed, half variable) for flexibility.

In one phone call and a few signed forms, he saved thousands and finally stopped dreading his rate increase notices.

Are There Any Costs Involved in Switching?

Yes, there can be — but brokers help you minimise or offset them. Common costs include:

• Discharge fees: Your current lender may charge $200–$400 to close the old loan.
• Application fees: Some new lenders charge setup fees, but many brokers find fee-free options.
• Valuation fees: Typically $200–$500, depending on the lender.
• Break costs: If you’re on a fixed-rate loan, breaking early can incur a fee — your broker will check this first.

Fortunately, many lenders in Victoria offer **cashback deals** (often $2,000–$4,000) for refinancing — which can more than cover these costs. Your broker will include these incentives in your savings calculation.

When It Might Not Be the Right Time to Switch

Refinancing isn’t always the answer. Your broker may advise staying put if:

• You’re on a fixed-rate loan with high break fees.
• Your property’s value has fallen, reducing your equity.
• Your income situation has recently changed, affecting eligibility.
• You plan to sell or move soon — short-term savings may not justify the switch.

That’s another reason brokers are invaluable — they’ll tell you when not to refinance, too.

Tips for Getting the Best Refinance Deal in Victoria

• 🧾 Keep your paperwork ready: Lenders require recent payslips, bank statements, and loan details.
• 💰 Know your property value: Equity above 20% can unlock lower rates and avoid LMI.
• 🏦 Ask about cashback deals: Brokers know which lenders are offering them right now.
• ⚖️ Compare features, not just rates: Offset accounts, redraws, and flexibility can save more long-term.
• 🕒 Review your loan annually: Even if you’re happy now, rates change quickly — stay ahead.

Final Thoughts – Work with Lowest Interest Rates

When your bank increases your home loan rate, it’s easy to feel stuck — but you’re not. You have options, and a good broker will help you find them.

At Lowest Interest Rates, we help Victorians review, refinance, and switch lenders seamlessly. Our brokers compare dozens of loans, crunch the numbers, and handle all the paperwork so you can relax knowing you’re getting the best deal available.

🏠 Don’t pay more than you should. If your bank has increased your rate, visit LowestInterestRates.com.au today. Let us help you switch smarter, save thousands, and take back control of your mortgage.