How we saved $7000 year on our home loan

How we saved by refinancing content

With interest rates on the rise, savvy borrowers willing to look around for a better home loan deal could be saving thousands of dollars every year, as Brisbane homeowner Jessica Steele discovered when she refinanced her mortgage.

When Jessica and her husband Brett first signed up for a mortgage, they were with a big bank and paying interest at a rate of 5.05% p.a..

Sick of high monthly repayments, the couple decided it was time to refinance, and turned to an online home loan comparison to search out better deals. They struck gold with Heritage Bank.

“We found Heritage could offer us a much lower rate of 4.14%, which meant we would save around $7,000 in home loan repayments each year,” Jessica said*.

“We’ve saved heaps by shopping around and will put the money towards our upcoming renovation later in the year.”

Jessica’s advice for other borrowers? “It doesn’t cost you anything to shop around and ask questions. Don’t just settle for what you’ve got because there’s always a better deal out there.”

According to Mozo director Kirsty Lamont, refinancing is a great way to slash your mortgage repayments but borrowers will need to budget in switching costs like loan discharge fees and any upfront fees that may be charged by the new lender.

Kirsty also recommends refinancers look for flexibility as well as a great rate. For instance an offset account can help you reduce the amount of home loan interest you pay, while an extra repayments facility gives you the option of paying off your loan faster.

Ready to refinance your mortgage and start saving? Check out these top home loan options, handpicked by our Mozo money editors.

TOP REFINANCE HOME LOANS Essentials Variable 90
  • Low 3.64% variable interest rate (3.66% comparison rate)

  • No application fee

  • Mozo Experts Choice Awards Winner 2017

Our verdict

Want to switch to a low rate loan with money saving features like free extra repayments and free redraw facility? Look no further. The Essentials Variable 80 is super wallet-friendly - just remember that this lender is online only, so you’ll need to be comfortable managing your mortgage from a computer screen.

UBank UHomeLoan - Discount Offer
  • 3.74% variable interest rate (3.74% comparison rate)

  • No upfront or ongoing fees

  • Mozo's Experts Choice Award Winner 2017

Our verdict

With no fees whatsoever and a rock bottom interest rate, the UHomeLoan offer presents real value for savvy refinancers. You can also make use of free extra repayments, a free redraw facility and the option to split your loan between variable and fixed rates, to help you pay down the costs as it suits you.

Gateway Bank Variable Rate Home Loan
Gateway Bank
  • 3.85% variable rate (4.16% comparison rate)

  • Multiple offset accounts and free redraw available

  • Up to three free splits

Our verdict

A mortgage with an offset account attached can help you save a tonne on interest, and the Gateway Credit Union Variable Rate Home Loan Package is a top choice. It also comes with handy features including a split rate option and free extra repayments, along with a low rate and no upfront fees. You will pay a yearly fee of $299 for all this value.

Bankwest Complete Fixed Home Loan
  • 3.78% fixed rate for three years (4.36% comparison rate)

  • No upfront application fee (service fees apply)

  • Free extra repayments up to $10,000 per year

Our verdict

If you’d prefer to refinance to the security of a fixed rate loan but don’t want to miss out on the flexibility offered by a variable rate, then you’re in luck. The Bankwest Complete Home Loan comes with a low fixed rate, but you can also make up to $10,000 of free extra repayments every year, plus you have the option to split between fixed and variable rates.

*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 the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. 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 loans Awards

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*This case study is based on individual circumstances. Rates mentioned may no longer be available. Please check our Heritage Bank home loans page for current rates.