You’re paying $6,007 extra interest on your business loan by staying with a big 4 bank

By Rhianna Dews · · 2 min read
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After conducting a recent analysis on business loans, our Mozo experts found that the average Big 4 Bank business loan rate was 88 basis points higher than the average rate of challenger banks. Mozo data also revealed that this difference in interest rates means staying with a Big 4 bank could cost you an extra $6,007 in interest on a $250,000 business loan over 5 years*.

“Much like residential mortgages, the Big 4 banks are giving their customers a bad deal on interest rates, yet they still account for 70% of business loans issued,” said Mozo Interest Rates, Banking and Business Expert Peter Marshall.

Mozo data showed that over the past 5 years challenger banks cut an average of 141 basis points off their business loan rates, bringing the current average rate down to 5.19%**. In the same period, the Big 4 Banks average mortgage secured business loan rate only went down by 57 basis points, to the current 6.07% average rate.

“The Big 4 banks’ failure to effectively compete on business loan rates is yet another example of how little pressure they feel,” Marshall said.

Related story: New up-and-coming lenders shaking up the business loan scene

In 2014, with the cash rate sitting at 2.50%, our analysis uncovered that the average Big 4 business loan rate was 6.64%, and surprisingly, the challenger banks average rate closely followed at 6.60%. But things have certainly changed since then.

“With cash rate dropping 100 basis points to 1.50% since 2014, challenger banks have taken the opportunity to make significant cuts to their to attract customers away from the major domestic banks,” Marshall said.

So if you’re currently with a big 4 bank, then you’re probably paying more than you should in extra interest. Now’s the time switch to a better deal. Visit our business loan comparison table to find a more competitive offer.

*Calculations are on fortnightly repayments and fees are not taken into account.

**Mozo calculated the average challenger bank rate using rates from Bank of Queensland, Bankwest, Bendigo Bank, Heritage Bank, St.George and Suncorp

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Last updated 11 May 2025Important disclosures

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