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
- loans.com.au
Essentials Variable 80
Owner Occupier, Principal & Interest
3.64% p.a. variable
3.66% p.a.
A low-rate home loan that could save you thousands. No monthly or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount
-
3.64% p.a. variable
-
3.66% p.a.
-
$520
-
$0.00
-
$0.00
-
yes - free
-
yes - free
-
no
-
80.00%
-
$50,000
-
$2,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- HSBC
Discounted Home Value Loan
Owner Occupier, Principal & Interest
3.59% p.a. variable
3.61% p.a.
Discounted rate for the life of the loan. A relationship manager to help you through the application process.
-
3.59% p.a. variable
-
3.61% p.a.
-
$150
-
$0.00
-
$300.00
-
yes - free
-
yes - free online
-
no
-
90.00%
-
$50,000
-
$7,500,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- State Custodians
Low Rate Home Loan with Offset
LVR<80%, Owner Occupier, Principal & Interest
3.68% p.a. variable
3.69% p.a.
A Low Rate Home Loan with a $0 Application Fee, Free Redraws & Extra Repayments
-
3.68% p.a. variable
-
3.69% p.a.
-
$0
-
$0.00
-
$300.00
-
yes - free
-
yes - free
-
yes
-
80.00%
-
$100,000
-
$2,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- Bank Australia
Basic Home Loan Special
LVR<80%, Owner Occupier
3.65% p.a. variable
3.66% p.a.
A Basic Home Loan which offers a competitive interest rate and other features to make your home or investment loan more affordable. No establishment fee until 31/12/2018. Option to fix full loan or split between fixed and variable. Redraw available.
-
3.65% p.a. variable
-
3.66% p.a.
-
$0
-
$0.00
-
$250.00
-
yes - free
-
yes - free
-
no
-
80.00%
-
$10,000
-
-
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- Well Home Loans
Well Balanced
Owner Occupier, Principal & Interest, LVR <80%
3.49% p.a. variable
3.53% 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.
-
3.49% p.a. variable
-
3.53% p.a.
-
$600
-
$0.00
-
$300.00
-
yes - free
-
yes - free
-
yes - $10/month
-
80.00%
-
$10,000
-
$2,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
-
Hot Deal Receive 20,000 Velocity Points
Virgin MoneyReward Me Variable Rate Home Loan
Owner Occupier, Principal & Interest, LVR<80%
3.68% p.a. variable
3.82% p.a.
Receive 20,000 Velocity Points for every $100,000 drawn at settlement. Access a 100% offset account to save on interest.
-
3.68% p.a. variable
-
3.82% p.a.
-
$150
-
$10.00 monthly
-
$320.00
-
yes - free
-
yes - free
-
yes
-
80.00%
-
$500,000
-
$749,999
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- Newcastle Permanent
Discounted Variable Home Loan Premium Plus Package
Owner Occupier, Principal & Interest
3.72% p.a. variable
4.12% p.a.
Experts Choice - Australia's Best Customer-Owned Banking & Home Lender of the Year 2018.
-
3.72% p.a. variable
-
4.12% p.a.
-
$0
-
$395.00 yearly
-
$0.00
-
yes - free
-
yes - free
-
yes
-
90.00%
-
$150,000
-
-
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
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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