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
- loans.com.au
Essentials Variable 80
Owner Occupier, Principal & Interest
3.64% p.a. variable
3.66% p.a.
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
-
3.64% p.a. variable
-
3.66% p.a.
-
$520
-
$0.00
-
$0.00
-
yes - free
-
yes - free
-
no
-
80.00%
-
$50,000
-
$2,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- HSBC
Discounted Home Value Loan
Owner Occupier, Principal & Interest
3.59% p.a. variable
3.61% p.a.
Discounted rate for the life of the loan. A relationship manager to help you through the application process.
-
3.59% p.a. variable
-
3.61% p.a.
-
$150
-
$0.00
-
$300.00
-
yes - free
-
yes - free online
-
no
-
90.00%
-
$50,000
-
$7,500,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- UBank
UHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
3.59% p.a. variable
3.59% p.a.
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.
-
3.59% p.a. variable
-
3.59% p.a.
-
$0
-
$0.00
-
$0.00
-
yes - free
-
yes
-
no
-
80.00%
-
$200,000
-
$699,999
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- State Custodians
Low Rate Home Loan with Offset
LVR<80%, Owner Occupier, Principal & Interest
3.68% p.a. variable
3.69% p.a.
A Low Rate Home Loan with a $0 Application Fee, Free Redraws & Extra Repayments
-
3.68% p.a. variable
-
3.69% p.a.
-
$0
-
$0.00
-
$300.00
-
yes - free
-
yes - free
-
yes
-
80.00%
-
$100,000
-
$2,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- NAB
Base Variable Rate Home Loan
Owner Occupier, Principal & Interest
3.87% p.a. variable
3.91% p.a.
Low ongoing rate. Free extra repayments and redraw facility. Only 5% deposit and no annual or monthly fees.
-
3.87% p.a. variable
-
3.91% p.a.
-
$600
-
$0.00
-
$350.00
-
yes - free
-
yes
-
no
-
95.00%
-
$20,000
-
-
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
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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