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
1.99% p.a.variable for 12 months and then 2.48% p.a. variable
2.47% p.a.
$1234
Product details Close detailsMozo experts choice awards won:
- Offset Home Loan - 2021
- Low Cost Home Loan - 2021
Smart Booster Home Loan
1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
1.99% p.a.variable for 12 months and then 2.48% p.a. variable
2.47% p.a.
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.
Smart Booster Home Loan
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.
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1.99% p.a.variable for 12 months and then 2.48% p.a. variable
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2.47% 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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1.75% p.a.
fixed 3 years2.22% p.a.
$1234
Product details Close detailsUHomeLoan
Owner Occupier, Principal & Interest
1.75% p.a.
fixed 3 years2.22% 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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1.75% p.a.
fixed 3 years -
2.22% 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 p.a.
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no
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no
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$0
-
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 2022. Receive 1.75% 3 year fixed rate when you apply by 29 April 2021 and settle within 90 days.
Read our Mozo Review to learn more about the UHomeLoan
Details Close
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2.09% p.a.
fixed 3 years2.43% p.a.
$1234
Product details Close detailsBasic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR<70%
2.09% p.a.
fixed 3 years2.43% p.a.
Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.
Basic Home Loan
Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.
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2.09% p.a.
fixed 3 years -
2.43% 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
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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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Mozo experts choice awards won:
- Home Loan Innovation - 2021
- Investor Home Loan - 2021
- Low Cost Home Loan - 2021
2.19% p.a. variable
2.19% p.a.
$1234
Product details Close detailsMozo 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
2.19% p.a. variable
2.19% p.a.
Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.
Celebrate Variable Home Loan
Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.
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2.19% p.a. variable
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2.19% p.a.
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$0
-
$0.00
-
$0.00
-
yes - free
-
yes - free
-
no
-
$0
-
60.00%
-
$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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1.89% p.a.
fixed 2 years2.15% p.a.
$1234
Product details Close detailsFixed Home Loan
Owner Occupier, Principal & Interest
1.89% p.a.
fixed 2 years2.15% p.a.
Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^
Fixed Home Loan
Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^
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1.89% p.a.
fixed 2 years -
2.15% p.a.
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$0
-
$0.00
-
$325.00
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yes - free, up to $20,000 p.a.
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yes - free
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Optional - $10 per month
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$0
-
90.00%
-
$50,000
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$2,000,000
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Fixed
-
Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
-
Read our Mozo Review to learn more about the Fixed Home Loan
Details Close
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Mozo experts choice awards won:
- Offset Home Loan - 2021
2.17% p.a. variable
2.20% p.a.
$1234
Product details Close detailsMozo experts choice awards won:
- Offset Home Loan - 2021
Well Balanced
Owner Occupier, Principal & Interest, LVR <80%
2.17% p.a. variable
2.20% p.a.
Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed. Offset Home Loan winner in the Mozo Expert's Choice Award for 2021.
Well Balanced
Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed. Offset Home Loan winner in the Mozo Expert's Choice Award for 2021.
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2.17% p.a. variable
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2.20% p.a.
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$785
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$0.00
-
$300.00
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yes - free
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yes - free
-
Optional - $10 per month
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$785
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80.00%
-
$200,000
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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 Well Balanced
Details Close
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1.89% p.a.
fixed 2 years3.67% p.a.
$1234
Product details Close detailsSpecial Fixed Rate Home Loan Premium Plus Package
Owner Occupier, Principal & Interest
1.89% p.a.
fixed 2 years3.67% p.a.
Great fixed low rate. Ability to split your loan between fixed and variable. Insurance discounts and $0 credit card or personal loan fee available. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent. Enjoy local branches and call centre.
Special Fixed Rate Home Loan Premium Plus Package
Great fixed low rate. Ability to split your loan between fixed and variable. Insurance discounts and $0 credit card or personal loan fee available. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent. Enjoy local branches and call centre.
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1.89% p.a.
fixed 2 years -
3.67% p.a.
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$0
-
$395.00 yearly
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$0.00
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yes - free up to $25,000 p.a.
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yes - free
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no
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$0
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80.00%
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$5,000
-
-
-
Fixed
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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$2,000 cashback when you refinance your home loan from another financial institution when you apply by 30 June 2021 and are funded by 31 August 2021, min $250k, LVR <80%
Read our Mozo Review to learn more about the Special Fixed Rate Home Loan
Details Close
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^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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