Big bank loyalty trap costs borrowers $19 million a day

By Mozo Editorial · Wednesday, 19 September 2018 · 2 min read

Fact Checked

f you’ve still got a mortgage with a big bank despite the recent rate hikes, it might be time to reconsider. New research from Mozo reveals that the big bank loyalty trap is costing Aussie borrowers $19 million a day in missed interest savings.*

That’s right, switching to the most competitive home loan on the market could deliver the average Big 4 bank customer up to $2,995 in savings each year**. So, why do so many of us stay put? Convenience is a factor for many, as is the mentality that switching is just too hard. But there are signs this is changing, with Mozo seeing a huge spike in recent days in Aussies comparing home loans online.

If you’re unhappy with your mortgage rate going up, why not make today the day you review your options and see how much you can save by switching. Here are some of the top home loans on the market right now to get you started….

LOW RATE HOME LOANS

Mozo may receive payment if you click products on our site. Mozo does not compare the entire market.

Important disclosures and comparison rate warning*

Important disclosures

Advertiser disclosure

Our goal at Mozo is to help you make smart financial decisions and our award-winning comparison tools and services are provided free of charge. As a marketplace business, we do earn money from advertising and this page features products with Go To Site links and/or other paid links where the provider pays us a fee if you go to their site from ours, or you take out a product with them. You do not pay any extra for using our service.

We are proud of the tools and information we provide and unlike some other comparison sites, we also include the option to search all the products in our database, regardless of whether we have a commercial relationship with the providers of those products or not.

'Sponsored', 'Hot deal' and 'Featured Product' labels denote products where the provider has paid to advertise more prominently.

'Mozo sort order' refers to the initial sort order and is not intended in any way to imply that particular products are better than others. You can easily change the sort order of the products displayed on the page.

We provide only general advice

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the Product Disclosure Statement (PDS) or offer documentation, or seeking independent advice. It is also advised to review Target Market Determination(TMD) of products that you are considering. The TMD can be found on the provider's website.

Comparison rate warning

WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

How Initial Monthly Repayments figures are estimated

Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

loans.com.au - Essentials Variable 90

3.64% variable rate (3.66% comparison rate*)
No ongoing fees (upfront fee applies)

Find out more

A low-rate home loan that could save you thousands. No monthly or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount.

UBank - UHomeLoan - Discount Offer

3.59% variable and comparison rate*
$0 upfront or ongoing fees

Find out more

A low rate Home Loan with no bank fees on variable rate loans. Easy & fast to apply. Choose between flexible repayments and make extra repayments for free on a variable rate home loan.

HSBC - Discounted Home Value Loan

3.64% variable rate (3.66% comparison rate*)
No ongoing fees

Compare 25+ lenders with our trusted partner, Lendi.

Talk to one of their experienced home loan specialists by answering a few questions online.

I want to refinance

Enjoy a discounted rate for the life of the loan, plus free extra repayments and a free online redraw facility. You'll also get a dedicated relationship manager to help you through the application process.

Tic:Toc - Fixed Home Loan

3.64% fixed rate for 2 years (3.65% comparison rate)
No application, assessment, valuation or ongoing fees

Find out more

100% online assessment and approval. No upfront or ongoing fees. Free unlimited redraw plus free additional repayments up to $20,000 and the flexibility to add on an offset account for $10 a month, even on fixed loans.

Virgin Money - Reward Me Variable Rate Home Loan

Variable rates from 3.64% depending on loan size (3.78% comparison rate)
Apply by 30 November 2018

Find out more

Receive 20,000 Velocity Points for every $100,000 drawn at settlement. Pay $0 application fees and access a 100% offset account to save on interest.

Calculate your home loan repayments

We can show you the monthly repayment amount for a range of loans

*Mozo compared the typical variable loan rate of each of the Big 4 lenders against the best rate on the market to find the potential savings per customer and then multiplied this by the estimated number of variable owner occupier customers at each lender to come up with a collective figure of savings. Rates are based on an 80% LVR loan of $300,000 to owner-occupiers over a 30-year term. Calculations were done on 12 September 2018.

**Based on the highest published package rate of a Big 4 bank for a loan of $300,000 of 4.72% versus 3.44%, the lowest rate in Mozo's database.

^* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

^** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.