How I'm Saving $87 a Week (or $4,500 This Year) on My Home Loan
Kirsty Lamont
22 Nov 2017
How competitive is your home loan rate?
Lenders are offering variable rates well below 4%
Huge savings on offer for borrowers prepared to ditch and switch
As a Director at comparison site Mozo.com.au, I consider myself to be pretty on top of my finances. So you can imagine the shock I got recently when reviewing my home loan rate to find that it had become seriously uncompetitive.
When I took out this loan with a smaller bank a few years ago, the rate delivered a serious saving on my previous loan. Secure in the knowledge I’d secured a great deal, I stopped paying close attention to my mortgage and focused on other things.
And that’s where I went wrong, because over the next couple of years my new lender proceeded to hike our rate little by little and hold back part of the Reserve Bank’s rate cuts over the same period.
I had become a victim of that time honoured tradition of banks fattening profit margins and was now paying 4.27% - more than 60 percentage points higher than the best rate on the market.
I knew there were now stacks of lenders offering rates below 4.00%, and after comparing the best loans decided to go with an online lender offering a super low variable rate... check out what's on offer in the comparison table below and then read on for the rest of my story.
Low Rate Home Loans – May 2018 - rates updated daily
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Promoted
loans.com.au3.03% p.a. variable
3.05% p.a.
$1234
Product details Close detailsloans.com.auSmart Home Loan
Owner Occupier, Principal & Interest
3.03% p.a. variable
3.05% p.a.
A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount.
Smart Home Loan
A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount.
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3.03% p.a. variable
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3.05% p.a.
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$520
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$0.00
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$0.00
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yes - free
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yes - free
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no
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80.00%
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$50,000
-
$1,000,000
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Variable
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
Read our Mozo Review to learn more about the Smart Home Loan
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Promoted
UBank
3.34% p.a. variable
3.34% p.a.
$1234
Product details Close detailsUBank UHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
3.34% p.a. variable
3.34% p.a.
Enjoy a low rate & no bank fees (on variable loans) from one of Australia's leading digital banks. Easy & fast to apply, you'll get free redraw with flexible repayments. Min. 20% deposit required. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.
UHomeLoan - Discount Offer
Enjoy a low rate & no bank fees (on variable loans) from one of Australia's leading digital banks. Easy & fast to apply, you'll get free redraw with flexible repayments. Min. 20% deposit required. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.
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3.34% p.a. variable
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3.34% p.a.
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$0
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$0.00
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$0.00
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yes - free
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yes
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no
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80.00%
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$200,000
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$699,999
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Variable
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
Read our Mozo Review to learn more about the UHomeLoan - Discount Offer
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Promoted
HSBC 3.47% p.a. variable
3.48% p.a.
$1234
Product details Close detailsHSBC Discounted Home Value Loan
Owner Occupier, Principal & Interest
3.47% p.a. variable
3.48% p.a.
As of 22nd July HSBC will be reducing this rate to 3.27% p.a.* (3.28% p.a. comparison rate^) so enquire now and be one of the first to make the most of this great rate. Enjoy unlimited free extra repayments and no ongoing service fees when you apply by 31 July (t&cs apply). Get help with the application process with an HSBC relationship manager. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.^
Discounted Home Value Loan
As of 22nd July HSBC will be reducing this rate to 3.27% p.a.* (3.28% p.a. comparison rate^) so enquire now and be one of the first to make the most of this great rate. Enjoy unlimited free extra repayments and no ongoing service fees when you apply by 31 July (t&cs apply). Get help with the application process with an HSBC relationship manager. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.^
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3.47% p.a. variable
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3.48% p.a.
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$150
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$0.00
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$300.00
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yes - free
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yes - free online
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no
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90.00%
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$50,000
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$7,500,000
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Variable
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
Read our Mozo Review to learn more about the Discounted Home Value Loan
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Featured Product
Athena3.09% p.a. variable
3.05% p.a.
$1234
Product details Close detailsAthenaVariable Home Loan
Owner Occupier, Principal & Interest
3.09% p.a. variable
3.05% p.a.
With low rates, no fees, and automatic rate match, new-comer Athena wants you to love them and leave them. Refinance only. Minimum 20% deposit.
Variable Home Loan
With low rates, no fees, and automatic rate match, new-comer Athena wants you to love them and leave them. Refinance only. Minimum 20% deposit.
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3.09% p.a. variable
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3.05% p.a.
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$0
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$0.00
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$0.00
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yes - free
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yes - free
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no
-
80.00%
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$100,000
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$2,000,000
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Variable
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
Read our Mozo Review to learn more about the Variable Home Loan
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Promoted
Bank of Queensland2.99% p.a.
fixed 3 years4.19% p.a.
$1234
Product details Close detailsBank of Queensland3 Year Discount Fixed Rate
Owner Occupier, Principal & Interest
2.99% p.a.
fixed 3 years4.19% p.a.
Apply by 31 August 2019. Minimum loan amount of $300k and LVR max of 80%. Free additional repayments up to $5,000 per year. $1,000 cashback for first home buyers
3 Year Discount Fixed Rate
Apply by 31 August 2019. Minimum loan amount of $300k and LVR max of 80%. Free additional repayments up to $5,000 per year. $1,000 cashback for first home buyers
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2.99% p.a.
fixed 3 years -
4.19% p.a.
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$450
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$10.00 monthly
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$320.00
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yes - free up to $5,000 p.a
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no
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no
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80.00%
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$300,000
-
-
-
Fixed
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
Read our Mozo Review to learn more about the 3 Year Discount Fixed Rate
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Was it all worth it?
I’ve just completed the refinance process and sure, while there were some minor hassles with sending in paperwork and organising to be at home for the valuer, the time involved was actually quite minor when you consider the size of the savings. $87 a week to be precise, or just over $4,500 a year.
If that’s not worth putting in a few hours on paperwork then I don’t know what is!
The kicker in all of this is that a week before the refinance went through, I received a letter from my soon to be old lender advising of yet another rate increase. Not this time suckers!
So, if you haven’t reviewed your home loan rate lately I’d strongly advise you do. Who knows how much you could save by switching?
Rates correct at time of writing. How much you could save by refinancing your home loan depends on your personal circumstances.
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