How much could switching to Unloan actually save you?

By Evlin DuBose · · 3 min read
Fact Checked
Advertiser disclosure
Collage of a person beckoning you to come look at the cyberverse (aka Unloan) while coins fall behind them.

If you’re refinancing your home loan, one of the most popular recommendations to check out these days is Unloan. 

And no wonder! With an interest rate 0.85% lower than the Mozo database average, a cumulative loyalty discount that shaves 1 basis point off your mortgage every year (with conditions), and a history of withholding from the full RBA rate hikes, there’s a lot going for it.

While estimating your future mortgage repayments can be tricky since variable rates ebb and flow with the economic tide, it’s worthwhile crunching some numbers to see your savings in action – and with such a unique discount rate, it’s well worth investigating. 

So let’s do some mortgage maths: how much could the Unloan loyalty discount actually save you?

Crunching the numbers of Unloan’s loyalty discount

Collage of a man in a yellow background reaching up to calculate the costs of Unloan

In theory, if you were eligible for the maximum Unloan discount rate (so 0.30% off the variable rate offer at the time), it could save you hundreds of on your monthly repayments, depending on the size and term of your loan. 

However, this is the golden scenario, and it doesn’t consider long-term savings over the life of your home loan: only what you’re saving during that year. In that way, Unloan’s discount rate just accumulates a buffer against the maximum interest rate – more of an “I could be paying much more than I am” reward. 

Still, if you’re looking to refinance, it’s worthwhile investigating how 0.01% p.a. off your interest rate could affect your monthly budget. 

For example, if you refinance to Unloan at its current variable rate of 4.99% p.a. (4.90% p.a. comparison rate*) with $500,000 left on your principal for a 20-year loan term, then, provided Unloan makes no rate hikes or cuts, in your first year you would repay $3,297 per month, according to Mozo’s mortgage repayment calculator.

But on the anniversary, your interest rate would decrease to 4.98% p.a., bringing your monthly repayments down to $3,294. This means the discount would only save you $3 a month during your second year ($36). 

If we plug the situation into Unloan’s repayment calculator , you can see how this could play out over time. Someone with a 0.20% (20-year) discount would pay $28 less per month than they did at the start of the loan.

Discount
1-year
5-year
10-year
15-year
20-year
Interest rate4.99% p.a.
4.95% p.a.
4.90% p.a.
4.85% p.a.
4.80% p.a.
Monthly repayments$3,297$3,285$3,276$3,271$3,269
Yearly savings$0$144$252$312$336

Mathematically, however, this assumes a lot of unrealistic conditions, like an unchanging variable rate and a constant time-value to money. Mostly, the table just illustrates the cushion Unloan’s discount could give you depending on the year. 

However, home loans are long-term commitments (no pun intended), so how much would Unloan actually save you over time?

Okay, but how much could Unloan save you long-term?

Collage of a person surfing the wave of home loan savings...in spaaaace.

When you make mortgage repayments, typically you pay down a portion of your principal (the amount you initially borrowed) with compounded interest tacked on. The amount of interest you pay will change as you pay down your principal over time precisely because it’s compounded. Add to that a decrease of 1 basis point yearly, and Unloan creates a gradual shift in your repayments.

There’s no easy formula to see this action, so solving the problem requires some fiddling around with a mortgage calculator. Luckily, Mozo loves calculators.

If we start with a base rate of 4.99% p.a. (4.90% p.a. comparison rate*) on a 20-year mortgage with $500,000 in principal, we can estimate the savings with the Unloan discount, provided the interest rate doesn’t change. Simply add the difference between each year’s monthly repayments and then voilá: savings!

So how does it look?

According to our majestic (and somewhat magical) maths, Unloan’s discount could in theory save you $4,296 in interest over twenty years, on top of any savings you could get from the competitively low interest rate. (But keep in mind this number doesn’t include any extra repayments or interest rate changes you may have over the life of your loan).

At the end of the day, the core of this question might really be: is Unloan’s discount worth it? And the answer? Up to you. There are plenty of vital questions to ask yourself when refinancing, and the interest rate is merely one of them. 

But if a loyalty reward sounds like a great perk to you, it could make Unloan well worth checking out! Not to mention Unloan won "Best New Home Loan" at this year's Mozo Experts Choice Home Loan Awards, so it's an eye-catching offer all around. 

Compare low-interest rate home loans below.

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Last updated 15 January 2025 Important disclosures and comparison rate warning*
What are your home loan needs?

Your loan-to-value ratio (LVR): 50%

Loan amount and LVR will affect interest rates.

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  • Offset Variable Home Loan

    • Principal & Interest
    • LVR <60%
    Interest rate
    6.34 % p.a.
    Variable
    Comparison rate
    6.37 % p.a.
    Initial monthly repayment
    $3,108
    Go to site

    Competitive interest rate. 100% offset account so your savings can reduce the amount of interest you pay on your home loan. No ongoing monthly fees. Buy your home with as little as a 5% deposit. You can redraw your repayments if you’re ahead. Choose to repay weekly, fortnightly, or monthly. Make extra payments without penalty, to pay off your home loan even faster.

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* 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

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 PDS or offer documentation, or seeking independent advice.

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.

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