The number one mortgage mistake
Rebeccah Elley
14 Jun 2017
Key Points
Big bank home loan loyalty costs Aussies $6 billion a year
Smaller lenders can save borrowers thousands of dollars a year
Lowest home loan rates start from just 3.66%
Home loan loyalty is costing Australian mortgage holders a whopping $6 billion a year, according to new research from comparison site Mozo.com.au.
Despite a surge in smaller lenders offering mortgage rates under 4.00%, borrowers are wasting $17 million a day by sticking with big bank lenders instead of switching to a cheaper home loan.
“The most expensive mistake the average borrower could make is sticking with the same loan over a 25 to 30 year period, says Mozo Director Kirsty Lamont.
“You’re paying a lazy tax and missing out on thousands of dollars in switching savings.”
“Refinancing to a new home loan only takes a few hours and the savings that can be made are significant - it could be the easiest couple of thousand dollars you make this year.”
Top Home Loans in March 2018
Rates updated daily. Advertiser disclosure.
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Mozo experts choice awards won:
- Offset Home Loan - 2021
- Low Cost Home Loan - 2021
1.85% p.a.variable for 24 months and then 2.25% p.a. variable
2.21% p.a.
$1234
Product details Close details
Mozo experts choice awards won:
- Offset Home Loan - 2021
- Low Cost Home Loan - 2021
Smart Booster Home Loan
2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
1.85% p.a.variable for 24 months and then 2.25% p.a. variable
2.21% p.a.
New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.
Smart Booster Home Loan
New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.
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1.85% p.a.variable for 24 months and then 2.25% p.a. variable
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2.21% 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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Optional - with 0.10% additional interest
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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 Booster Home Loan
Details Close
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1.95% p.a.
fixed 3 years2.27% p.a.
$1234
Product details Close detailsUHomeLoan
Owner Occupier, Principal & Interest
1.95% p.a.
fixed 3 years2.27% p.a.
$0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.
UHomeLoan
$0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.
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1.95% p.a.
fixed 3 years -
2.27% 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 up to $20,000 during fixed rate term
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no
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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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Fixed
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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$395 Establishment fee waived for fixed rate loans that settle by 30 September 2021.
Read our Mozo Review to learn more about the UHomeLoan
Details Close
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Mozo experts choice awards won:
- Home Loan Innovation - 2021
- Investor Home Loan - 2021
- Low Cost Home Loan - 2021
1.99% p.a. variable
1.99% p.a.
$1234
Product details Close details Mozo experts choice awards won:
- Home Loan Innovation - 2021
- Investor Home Loan - 2021
- Low Cost Home Loan - 2021
Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
1.99% p.a. variable
1.99% p.a.
Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.
Celebrate Variable Home Loan
Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.
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1.99% p.a. variable
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1.99% p.a.
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$0
-
$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
-
60.00%
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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 Celebrate Variable Home Loan
Details Close
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1.99% p.a. variable
1.99% p.a.
$1234
Product details Close detailsVariable Home Loan
Owner Occupier, Principal & Interest
1.99% p.a. variable
1.99% p.a.
Refinance only. Super-fast digital application process. Zero upfront fees. No on-going service fees. Free 100% offset sub account. Comes with Visa debit card and the ability to use digital wallets; Apple and Google Pay. 25% deposit required.
Variable Home Loan
Refinance only. Super-fast digital application process. Zero upfront fees. No on-going service fees. Free 100% offset sub account. Comes with Visa debit card and the ability to use digital wallets; Apple and Google Pay. 25% deposit required.
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1.99% p.a. variable
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1.99% 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
-
yes - offset sub account
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$0
-
75.00%
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$100,000
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$2,500,000
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Variable
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Principal & Interest
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Owner Occupier
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Monthly
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Read our Mozo Review to learn more about the Variable Home Loan
Details Close
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2.09% p.a.
fixed 3 years2.32% p.a.
$1234
Product details Close detailsBasic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR<70%
2.09% p.a.
fixed 3 years2.32% 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.
Basic Home Loan
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.
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2.09% p.a.
fixed 3 years -
2.32% p.a.
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$0
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$0.00
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$400.00
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yes - free
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yes - free
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no
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$0
-
70.00%
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$150,000
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$750,000
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Fixed
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Principal & Interest
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Owner Occupier
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Monthly
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Read our Mozo Review to learn more about the Basic Home Loan
Details Close
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Featured Product
2.44% p.a. variable
2.49% p.a.
$1234
Product details Close detailsPrime Home Loan
Owner Occupier, Principal & Interest, LVR <70%
2.44% p.a. variable
2.49% p.a.
Competitive low variable rates for borrowers with 30% deposit. Flexible home loan with no ongoing fees. Extra repayments and redraw available. Get a dedicated specialist for the loan application process.
Prime Home Loan
Competitive low variable rates for borrowers with 30% deposit. Flexible home loan with no ongoing fees. Extra repayments and redraw available. Get a dedicated specialist for the loan application process.
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2.44% p.a. variable
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2.49% p.a.
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$710
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-
-
$250.00
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yes - free
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yes - free
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no
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$710
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70.00%
-
$100,000
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$1,250,000
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Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
-
Read our Mozo Review to learn more about the Prime Home Loan
Details Close
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Mozo experts choice awards won:
- Low Cost Home Loan - 2021
1.99% p.a. variable
2.02% p.a.
$1234
Product details Close details Mozo experts choice awards won:
- Low Cost Home Loan - 2021
Variable Home Loan Special
Owner Occupier, Principal & Interest, LVR <70%
1.99% p.a. variable
2.02% p.a.
Special rate applies to home loan applications submitted by 31 October 2021. Unlimited additional repayments, free redraw, 100% offset account. 30% deposit required. Simple online application. Low Cost Home Loan winner in the Mozo Expert's Choice Awards for 2021.
Variable Home Loan Special
Special rate applies to home loan applications submitted by 31 October 2021. Unlimited additional repayments, free redraw, 100% offset account. 30% deposit required. Simple online application. Low Cost Home Loan winner in the Mozo Expert's Choice Awards for 2021.
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1.99% p.a. variable
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2.02% p.a.
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$849
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$0.00
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$500.00
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yes - free
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yes - free
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Optional - $10 per month
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$849
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70.00%
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$150,000
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$1,500,000
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Variable
-
Principal & Interest
-
Owner Occupier
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Weekly, Fortnightly, Monthly
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Special rate applies to home loan applications submitted by 31 October 2021.
Read our Mozo Review to learn more about the Variable Home Loan Special
Details Close
^See information about the Mozo Experts Choice Home loans Awards
Here are Lamont’s three top tips for getting a better home loan deal:
1. Compare your rate with the best on market
“Look beyond the big four banks to find the best value. Smaller non-bank and online lenders like loans.com.au, UBank and Newcastle Permanent offer some of the lowest home loan rates in the market”, says Lamont.
To research the best value home loans, use a reputable comparison website like Mozo.com.au to compare home loans side by side and avoid wasted hours spent visiting each lender’s website.
2. See if you're up for any switching costs
Once you’ve compared the best rates to find out how much you can save by switching, Lamont says the next step is to work out any costs involved in refinancing.
“You might be charged a discharge fee from your current lender or an upfront fee by the provider you’re switching to. In most cases however, the savings to be made by switching will outweigh any refinancing costs.”
3. Choose a loan with flexible features
Lamont’s last piece of advice is to create a shortlist of the types of features you would like in your new loan.
“Features like an extra repayments facility and offset account can help you to pay down your home loan faster and save even more on interest charges,” adds Lamont.
Want to see if you can save thousands on your home loan?
Mozo compares more than 80 lenders to help you find the best value home loan for your needs. Compare now >>
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