‘She’ll be right attitude’ costing Aussie mortgage holders long-term

An Aussie man in a cork string hat gives you the thumbs up in front a suburban home. There's a speech bubble coming from his mouth containing a series of emojis that represent the phrase 'Yeah nah, she'll be right'.
'Yeah nah, she'll be right'

New research from Mozo for the 2024 Home Loan Report discovered that a startling percentage of mortgage holders think refinancing isn’t worth the effort when it could save them tens of thousands. 

A nationally representative survey of over 2,550 Australian adults found that 74% of home loan borrowers believe refinancing is too much of a hassle and that it’s easier to just stick with the same provider.

Mozo finance expert, Rachel Wastell, says Australian borrowers are making a poor choice by burying their heads in the sand instead of refinancing.

“Mortgage holders with a she’ll be right attitude could be paying tens of thousands of dollars more in interest than those who switch to a lower rate,” said Wastell. 

It’s a problematic attitude because Mozo also found that those who compare home loans every six months have an average variable rate that is 0.38% lower than those who haven’t compared since getting their home loan. 

How often borrowers compare interest rates
The group’s average variable interest rate 
Estimated monthly repayment on a $500k home loan over 25 years
Every 6 months
6.14% p.a. 
$3,264
Once a year
6.20% p.a.
$3,283
Every 2 years or more 
6.48% p.a.
$3,370
Never since getting their home loan
6.52% p.a.
$3,382

As you can see, borrowers who compare more often typically have a lower interest rate on average. This is because variable rates change frequently, especially when the Reserve Bank of Australia (RBA) plays around with the cash rate. 

Just two years ago, home loan interest rates were at historic lows when the RBA pushed the cash rate down to 0.10% to kickstart Australia’s economic recovery from the pandemic.  

The unusually sharp 4.25% increase in the cash rate since May 2022 would’ve bumped up most people’s rates and repayments considerably – unless they had the foresight (or luck) to get a fixed home loan for a few years. 

While you might look at the $118 per month saving that a 0.38% lower interest rate could get you and think, ‘Geez, what’s the big fuss?’, calculating the world of difference it makes, in the long run, should convince you to take a second look at your rate.

"...a rate difference of less than 1% can equate to five figures in savings..."

The long-term ramifications of paying a higher interest rate 

“Home loans are decades of debt and interest compounds, so a rate difference of less than 1% can equate to five figures in savings over a 25-year loan term,” said Wastell. 

Using a mortgage repayment calculator, we can work out that those who compare interest rates every six months, at a rate of 6.14% p.a., could wind up paying $479,330 in total interest over 25 years. That’s a lot, right? It’s almost the same as the amount they borrowed in the first place. 

Let’s see how it works out for those who haven’t compared rates since getting their home loan, who are charged, on average, 0.38% more… At a rate of 6.52% p.a., the total interest you’ll pay after 25 years is $514,686. That’s an extra $35,356 that goes straight to your lender, instead of towards a deposit on an investment property, or into your superannuation.

Sure, you might have to cover some additional costs when you refinance, such as discharge and valuation fees, but these are typically negligible compared with what you could save on interest over time. 

So, if you’re one of the 74% of Australians who haven’t shopped around for a new home loan since buying your place, take this as a sign to compare refinance rates and see if you can find a cheap home loan that works for you. 

You might find the best home loans have exactly what you’re looking for, or you might want to learn about the different home loan features you’ll encounter during your home loan comparison before you dive in. 

Take a gander at these featured home loans to get started. Do any of these beat your current lender’s offer?

Home loan comparisons on Mozo - last updated 27 May 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    6.25% p.a.
    fixed 3 years
    6.20% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    Compare
    Details
  • Discount Variable Home Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

    Compare
    Details
  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

    Compare
    Details
  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

    Compare
    Details

* 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.