Australians are facing the most aggressive rate hiking cycle since the early 1990s.
As a result, new research from Mozo, conducted as part of the 2024 Mozo Experts Choice Awards for Home Loans, reveals 75% of Aussie mortgage holders are openly concerned about their repayments.
After 13 rate hikes, Mozo personal finance expert Rachel Wastell says Aussies are paying upwards of a thousand dollars more a month to cover their mortgage.
“As the Reserve Bank of Australia isn’t set to cut rates until later this year, homeowners are understandably concerned with how they’ll manage repayments," Wastell says. "But Mozo research shows more than half are unaware of critical home loan features that could save them thousands.”
Since May 2022, the Reserve Bank of Australia (RBA) has increased the cash rate by over 4% after 13 rate hikes.
Mozo data shows most banks have passed these interest rate hikes on in full to variable rate mortgage holders, and repayments have skyrocketed as a result.
Following 13 interest rate hikes, Aussie mortgage holders are now paying thousands of dollars more a month to cover the mortgage*, and the RBA isn’t expected to cut rates until the latter half of 2024.
With many bracing themselves for another year of high repayments, it’s no shock that 75% of Australian mortgage holders are concerned about their home loan repayments.
| Home Loan Amount ($) | Monthly Repayment (May 2022) | Monthly Repayment (March 2024) |
| $350,000 | $1,663 | $2,436 |
| $500,000 | $2,376 | $3,480 |
| $750,000 | $3,564 | $5,220 |
| $1,000,000 | $4,753 | $6,960 |
*Based on 25 year terms, Owner Occupier Principal & Interest, LVR <80%. Average variable rate of 3.02% p.a. as of May 2022, and 6.83%p.a. as at March 2024. Accurate as at 12 March 2024.
While 75% of Aussie mortgage holders were openly concerned about their repayments according to Mozo’s research, many were unaware of critical features that could save them money over time.
There is a huge opportunity for Australians to save hundreds of thousands of dollars over the life of their loan by brushing up on their home loan literacy.
Millions of Aussie homeowners aren’t aware of how to make the most of their home loans.
Mozo’s research found:
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Take a look at the winners' list of the 2024 Mozo Experts Choice Awards for home loans, and you might notice a distinct lack of Big Four banks.
Of the 98 award-winning products:
Of the 41 lenders who won:
If you’re looking for ways to trim down your home loan costs, consider these simple hacks:
Australians can’t seem to shake their addiction to the big banks.
According to APRA, the Big Four hold 73% of owner-occupier home loans in Australia, despite having higher average variable home loan rates.
The average Big Four variable rate is 7.48% p.a., compared to an average rate of 6.10% p.a. across the winners of the 2024 Mozo Experts Choice Home Loan Awards.
The difference between these rates could equate to savings of $436 per month.
Based on the average Big Four rate of 7.48% p.a. vs average winners rate of 6.10%p.a. on a $500k owner-occupier loan, 80% LVR, principal & interest, on a 25 year term.
Mozo’s research found that 46% of borrowers don’t have a home loan with an offset account. So, there’s a big opportunity for home loan borrowers to save a significant amount of money here.
The main benefit of an offset account is that it reduces the size of your principal that you have to pay interest on.
For example, a borrower with $50k in an offset account and a $500k loan amount is only charged interest on $450k.
On a variable rate of 6.82% p.a., with $50k in an offset, that borrower could save $284 per month.
Mozo research found 20% of Aussie borrowers hadn’t compared their rate since getting their home loan.
But those who compare regularly are more likely to have lower interest rates.
The research uncovered that those who compare home loans every 6 months had an average interest rate of 6.14% p.a. – 0.38% lower than those still on the same rate they started with.
That equates to a saving of $118 per month on a $500k loan.
| How often they compare home loan rates | Average home loan rate (p.a.) | Monthly repayments on $500k home loan |
| Every 6 months | 6.14% | $3,264 |
| Once a year | 6.20% | $3,283 |
| Every 2 years or more | 6.48% | $3,370 |
| I have not compared since getting my home loan | 6.52% | $3,382 |
Switching your repayment frequency from monthly to fortnightly could save you thousands over the life of your loan by reducing the amount of interest you accrue.
A $500k loan over 25 years at a rate of 6.82% p.a. will mean you pay $3,477 per month, resulting in interest repayments totalling $542,856.
If you switch to fortnightly repayments of $1,738.50, your total interest at the end of your loan could be $431,806, meaning you’ve saved yourself a whopping $111,050.
Though it does mean you pay a little extra now, it is a simple change that gives you a significant saving over the loan term.
Mozo’s research found that 7% of borrowers don’t know their home loan type, despite the type of home loan you have having a big impact on your repayments.
Split rate home loans give borrowers stability and adaptability by charging part of your loan under a fixed rate and the other part under a variable interest rate.
By splitting the loan, borrowers can enjoy the assurance of fixed rates while benefiting from potential variable rate cuts, allowing home loan holders to ‘hedge their bets’ against RBA interest rate rises or cuts.
When possible, consider renting out a spare room, a storage space, a garage, or a parking space for some extra income.
According to Parkhound pricing data, you could earn approximately $400 per month extra.
That’s cash you could put towards paying off your mortgage.
Media contact
Rachel Wastell
+61 412 686 458
pr@mozo.com.au
Mozo.com.au is one of Australia’s leading financial comparison sites in Australia.
With a team of banking, insurance, and money experts on hand, Mozo provides industry insights, consumer research statistics and money management tips to major media publications and national broadcast networks.
Mozo is part of Future PLC, the global platform for specialist media that connects millions of people worldwide with their passions. A key brand in the global Future Wealth portfolio, Mozo has been recognised in Australia for simplifying the money maze with award-winning calculators and comparison tools, to help Australians make their money count for more.