Banks are competing fiercely for new customers as rising interest rates keep the refinancing boom alive.
Three of the big four banks - Commonwealth Bank, Westpac and ANZ - have all discounted their new customer variable rates in a bid to lure customers away from their competitors.
The big banks are not the only lenders offering sweeteners to new customers. RateCity data shows almost 40 lenders have cut a variable rate for new customers at least once, with some discounting multiple times.
RateCity research director Sally Tindall said lenders were also offering cashback deals to entice new customers, which are essentially cash handouts worth a few thousand dollars attached to new home loans.
"The combination of the low rate and cashback thrown in as well can be enough for someone thinking about refinancing to jump in," Ms Tindall told AAP.
But she said borrowers should be wary about cashback deals, with lower rate loans typically offering the better deal in the long run.
"Free cash might be tempting, particularly at the moment, but unless you switch to a new loan with a competitive rate it could end up costing you thousands of dollars more in interest over time," she explained.
Lenders have been passing the central bank's interest rate hikes onto their existing customers, sparking a refinancing boom as mortgage holders look to lighten the burden of their soaring repayments.
On Tuesday, the Reserve Bank hiked interest rates for the eighth month, taking the cash rate to 3.1 per cent.
Banks are also looking to win business from lenders on expiring fixed-rate loans, who are in for a shock when their ultra-low fixed-rate loans expire.
These borrowers face mortgage repayment hikes in the thousands, according to an Aussie Home Loans and CoreLogic report.
Sydney borrowers who managed to snag a bargain fixed rate in May 2021 could see mortgage repayments lurch almost $2000 higher per month when the RBA is done with its rate hikes.
Aussie Home Loan's Brad Cramb said households on expiring fixed rate loans should consider shopping around rather than sticking with their same lender.
"We're likely to also see fixed rate borrowers with expiring terms in 2023 facing revert rate shock, with their interest rates reverting to base line increases of around three to four percentage points," he said.
