Four out of five Aussies don’t know their home loan rate right now, says UBank

Monday 19 February 2018

Article by Ben Tosi

Do you know your home loan rate? That’s the question UBank asked over 1,000 Aussies as part of its Know Your Numbers Index and as it turns out, we don’t.

Woman is frustrated by not knowing what her home loan rate is. 

The Galaxy research poll revealed that 82% of Aussies didn’t know their current home loan rate and even more of us were unsure of our monthly expenses.

“The Know Your Numbers Index found that 86% of Australians are unaware of monthly expenses, which can cause financial problems over time,” said Lee Hatton, CEO of UBank.

“While there’ll always be some costs we can’t plan for, it’s important budgets are created and stuck to, to minimise potential stress in the future.”

RELATED: Introductory rate bait costing Aussie homeowners thousands

Our mortgage mindlessness isn’t just costing us in dollars and cents, but emotionally and mentally as well, with almost 60% of Aussies reporting that they’ve lost sleep over their finances.

Why should I know my home loan rate?

Arguably the most important part of any homeowner’s budget, your home loan rate will have a huge bearing on your monthly expenditure.

And while we’ve improved on last year, when even fewer Aussies could recall their home loan rate (85%), Hatton says the number is still too high and if you’re part of the unhealthy majority, it could be costing you thousands.

“While there was a slight improvement on last year, there are still too many Aussies out there who don’t know their mortgage rate,” she said.

“We encourage people to do their research and stay on top of their mortgage rate, as thousands of dollars can be saved by simply understanding where the best offers are and refinancing.”

The take home message? Know your numbers (and get some sleep)!

The difference a mortgage rate makes

An uncompetitive mortgage rate is a real budget-buster for many Aussie households - but exactly how much could your blissful ignorance be costing you?

SCENARIO #1: Jack and Jill take care of their home but don’t put as many hours into their mortgage, rarely checking in to see what their variable rate looks like and now that it has crept up to an uncompetitive 4.35% (the average variable rate on offer in Mozo’s database at the time of writing).

This means their $500,000 loan accrues a monthly interest repayment of $2,489 and will cost them $396,061 in interest over the life of a 30 year loan, assuming they continue to make principal and interest repayments.

SCENARIO #2: Bob and Bill, on the other hand, put a little more work into their home loan research, checking Mozo’s comparison tables relatively regularly to make sure they’re getting the best value deal.

They also owe $500,000 on their home but with UBank’s HomeLoan Discount Offer (a Mozo Experts Choice Winner, might we add) they’ve nabbed a competitive variable rate of 3.69%. This means that they’re paying $190 less each month and saving a whopping $68,569 over the life of the same 30 year loan.

The moral of the story; be more like Bob and Bill.

RELATED: Loyalty doesn’t pay: is it time to break up with your bank?

You can start by checking out Mozo’s home loan comparison tables and once you find a rate or product you think might suit you, head to our mortgage repayments calculator to get an idea of what your new monthly mortgage expenses could look like.

*All rates and calculations correct at the time of writing.

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