At a glance
- The problem: no review in more than five years, and a rate more than 0.5% above what other lenders were offering.
- What we did: compared their loan across our lender panel and moved it to a competitor.
- The result: a lower rate that saves them thousands of dollars a year in interest.
The situation
These clients had been with the same lender for more than five years and had never reviewed their home loan. Their repayments were going out on time, so there was no obvious reason to look. But over those years their rate had drifted, and they were paying more than 0.5% above the competitive rates lenders were offering at the time.
That's common. In 2020 the ACCC found that borrowers with loans three to five years old were paying, on average, about 0.58% more than the average rate on new loans, and the gap was even wider on older loans. Source: ACCC
What we did
- Compared their loan against lenders on our panel to find a lower rate with the features they needed.
- Added up the costs of switching, so they could see the saving was worth it.
- Handled the application and the switch from their old lender to the new one.
It was a simple refinance. No change to the loan size, no complicated restructure, just a better rate.
The result
Their new rate saves them thousands of dollars a year in interest. To give a sense of scale, on a $600,000 loan, a rate 0.5% lower means about $2,999 less interest in the first year alone.
Illustration only, not our clients' figures. Based on principal and interest repayments over 25 years at 6.50% and 6.00%.
What you can take from it
- Review your loan at least once a year. A loan that suited you a few years ago may not be competitive now.
- Ask your lender first. Many will lower your rate to keep you, and it costs nothing to ask.
- Check the switching costs. Our refinance calculator shows how long a lower rate takes to cover them.
Not sure if you're paying too much? Our Free Rate Check doesn't involve a credit check.