How you can engineer yourself a Christmas bonus with your home loan

We’re just two weeks out from Christmas which means peak present buying season is upon us, but instead of only watching cash leave your wallet over the holiday period, could you organise yourself a festive bonus as well?

For many Australian homeowners that’s not just wishful thinking, it’s a real possibility if they’re able and willing to refinance their home loan.

Now that might not sound as thrilling as opening a present from under the Christmas tree, but it could put hundreds of dollars back in your pocket every month and save you thousands over the life of your loan.

That’s because home loan interest rates have plummeted since June 2019, and even in the past month with the most recent Reserve Bank cut. So, if you haven’t switched home loans really recently you’re probably paying more than you need to.

Need convincing? Let’s crunch the numbers.

How much could you save by refinancing?

According to the ACCC, nearly 80% of the Australian home loan market is accounted for by ANZ, Commonwealth Bank, NAB and Westpac.

The thing about the major banks is that they don’t always offer the sharpest rates though. In fact, the average big four variable rate for owner occupiers is currently 3.56% - a decent way above the average variable rate in our database.

This isn’t just limited to big bank customers either. The sizeable gap between the lowest and average variable rate in our database means that there’s likely to be plenty of opportunity for borrowers to switch and save - especially those who haven’t refinanced in the past few years.

And a difference in rates can equate to substantial savings.

The Mozo home loan repayments calculator shows that a borrower with a $400,000 loan being paid off over 25 years with P&I repayments could save $269/month by switching from the average to lowest rate -  that would be $80,549 interest saved over the life of the loan.

RELATED: 19 lenders are offering refinancers up to $3,000 cashback to switch home loans

Ready to compare rates to see if you could benefit from refinancing? Check out the great offers in the table below, or head on over to the Mozo home loan comparison hub for an even larger range of offers.

^Currently available with the Super Saver Variable loan from Reduce Home Loans for owner occupier borrowers with an LVR below 80%.

^^Monthly repayment calculations based on an owner occupier borrower making principal and interest repayments on a loan of $400,000 over 25 years.