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.”
Home loan comparisons on Mozo - 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
-
- Aussie
Select Basic Variable
LVR<80%, Owner Occupier, Principal & Interest
3.69% p.a. variable
3.70% p.a.
A competitive rate with no ongoing fees. Reduce interest by making additional payments.
-
3.69% p.a. variable
-
3.70% p.a.
-
$330
-
$0.00
-
$535.00
-
yes - free
-
yes - free
-
no
-
80.00%
-
$100,000
-
$5,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Fortnightly, Monthly
Details Close
-
- NAB
Base Variable Rate Home Loan
Owner Occupier, Principal & Interest
3.69% p.a. variable
3.73% p.a.
$1,250 BONUS WITH AN ELIGIBLE NAB HOME LOAN BANKING BUNDLE*. Low ongoing rate. Free extra repayments and redraw facility. Only 5% deposit and no annual or monthly fees.
-
3.69% p.a. variable
-
3.73% p.a.
-
$600
-
$0.00
-
$350.00
-
yes - free
-
yes
-
no
-
95.00%
-
$20,000
-
-
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
Details Close
-
- UBank
UHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
3.59% p.a. variable
3.59% p.a.
A low rate Home Loan with no bank fees on variable rate loans. Easy & fast to apply. Choose between flexible repayments and make extra repayments for free on a variable rate home loan.
-
3.59% p.a. variable
-
3.59% p.a.
-
$0
-
$0.00
-
$0.00
-
yes - free
-
yes
-
no
-
80.00%
-
$200,000
-
$699,999
-
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
3.71% p.a.
A Low Rate Home Loan with a $0 Application Fee, Free Redraws & Extra Repayments
-
3.68% p.a. variable
-
3.71% p.a.
-
$286
-
$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
-
- Newcastle Permanent
Discounted Variable Home Loan
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
-
- ME
Flexible Home Loan
Owner Occupier, LVR<80%, Principal & Interest
3.69% p.a. variable
4.11% p.a.
A flexible Home Loan with Member Package for Owner Occupiers including a low rate, redraw and offset. Annual fee $395. Experts Choice - Australia's Best Bank 2018.
-
3.69% p.a. variable
-
4.11% p.a.
-
$0
-
$395.00 yearly
-
$300.00
-
yes - free
-
yes - free
-
yes
-
80.00%
-
$400,000
-
$699,999
-
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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