How I'm Saving $87 a Week (or $4,500 This Year) on My Home Loan
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.au
2.57% p.a. variable
2.59% p.a.
$1234
Product details Close detailsloans.com.au Smart Home Loan 80
Owner Occupier, Principal & Interest
2.57% p.a. variable
2.59% p.a.
A low-rate home loan that could save you thousands, with no ongoing fees plus unlimited extra repayments and free redraws. Mozo Experts Choice Low Cost Home Loan 2020.^ 20% deposit required. Limited time only.
Smart Home Loan 80
A low-rate home loan that could save you thousands, with no ongoing fees plus unlimited extra repayments and free redraws. Mozo Experts Choice Low Cost Home Loan 2020.^ 20% deposit required. Limited time only.
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2.57% p.a. variable
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2.59% 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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$520
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80.00%
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$50,000
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$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
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Read our Mozo Review to learn more about the Smart Home Loan 80
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Promoted
UBank 2.59% p.a. variable
2.59% p.a.
$1234
Product details Close detailsUBank UHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
2.59% p.a. variable
2.59% p.a.
Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.
UHomeLoan - Discount Offer
Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.
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2.59% p.a. variable
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2.59% 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
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$0
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80.00%
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$200,000
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-
-
Variable
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the UHomeLoan - Discount Offer
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Promoted
HSBC 2.09% p.a.
fixed 2 years2.98% p.a.
$1234
Product details Close detailsHSBC Fixed Rate Home Loan
Owner Occupier, Principal & Interest, LVR <80%
2.09% p.a.
fixed 2 years2.98% p.a.
Have the security of a fixed rate for 2 years with the option to split with one of the HSBC variable Home Loans. No ongoing monthly service fees or annual fees. Mozo Experts Choice Fixed Home Loan 2020^
Fixed Rate Home Loan
Have the security of a fixed rate for 2 years with the option to split with one of the HSBC variable Home Loans. No ongoing monthly service fees or annual fees. Mozo Experts Choice Fixed Home Loan 2020^
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2.09% p.a.
fixed 2 years -
2.98% p.a.
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$0
-
$0.00
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$300.00
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yes - free up to $10,000 p.a.
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no
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no
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$0
-
80.00%
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$50,000
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$7,500,000
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Fixed
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the Fixed Rate Home Loan
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Promoted
Suncorp2.29% p.a.
fixed 2 years3.32% p.a.
$1234
Product details Close detailsSuncorpFixed Home Loan Special Offer Home Package Plus
Owner Occupier, Principal & Interest
2.29% p.a.
fixed 2 years3.32% p.a.
No monthly account keeping fees & No loan establishment fee. Get a $2,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan of $250k+. T&Cs & eligibility criteria apply.
Fixed Home Loan Special Offer Home Package Plus
No monthly account keeping fees & No loan establishment fee. Get a $2,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan of $250k+. T&Cs & eligibility criteria apply.
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2.29% p.a.
fixed 2 years -
3.32% p.a.
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$0
-
$375.00 yearly
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$350.00
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yes - free up to $500 per month
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no
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no
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$0
-
90.00%
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$150,000
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-
-
Fixed
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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Refinance from another lender to receive a $2,000 cash bonus for loans of at least $250,000 or $3,000 bonus for loans over $750,000. Available for loans with an LVR <90% and applications made by 30 September 2020 and settled by 29 December 2020.
Read our Mozo Review to learn more about the Fixed Home Loan Special Offer
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Promoted
Athena 2.59% p.a. variable
2.55% p.a.
$1234
Product details Close detailsAthena Variable Home Loan
<80% LVR, Owner Occupier, Principal & Interest
2.59% p.a. variable
2.55% p.a.
Fast online application with no fees. Free extra repayments and redraw facility. Min 20% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^
Variable Home Loan
Fast online application with no fees. Free extra repayments and redraw facility. Min 20% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^
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2.59% p.a. variable
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2.55% 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
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$0
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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
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Read our Mozo Review to learn more about the Variable Home Loan
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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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