I’m a home loans expert, so why am I getting ripped off?

Turns out I'm not the only one, with 82% of Australian homeowners feeling "ripped off".

Home loan rates are extremely low right now, but a lot of borrowers are missing out. Including me.

I've been writing about home loans for over 4 years. I look at mortgage rate data and speak to experts every week. I'm not much fun at parties but I know what a good deal on a home loan looks like.

And yet, when I look at my lender's website I see that they're offering an interest rate below 2.00% on the same home loan I have. But they're charging me more than 2.50%!

I got my home loan over a year ago. At the time it was one of the lowest rates on the market. But as rates continued to fall, my lender lowered rates to attract new customers. While leaving me out in the cold.

Here's how much I'm losing out with a higher rate (figures below are adjusted in the interest of privacy and were calculated using Finder's loan repayment calculator):

• Loan: $500,000 over 30 years
• Current rate: 2.55%
• Lender's new rate: 1.90%
• Monthly repayments at 2.55% = $1,988
• Monthly repayments at 1.90% = $1,823
• Difference = $165 a month or $1,980 a year

I'm paying an extra $1,980 a year for nothing!

"We have clients coming to us all the time stating that their bank won't offer them the same rate as the advertised rates [for new customers]," Zippy Financial mortgage broker Louisa Sanghera told Finder.

"They feel let down and cannot understand why their bank is not looking after them, even though they've been loyal clients for years."

I decided to call my lender to ask for a better deal. But first I asked Sanghera for some tips.

"Don't just speak to customer service, go to the client retention team directly," Sanghera suggested. "The retention teams have better rates available than the staff working the phones on the customer service team. And always tell them you are speaking to a broker too to compare the deals."

"Then you can say, 'I don't want to refinance but I will have no alternative if I can get a better deal'."

Easier than you think

So I called my lender up. There was no direct line to the customer retention team but there was a support line for existing customers. I told them what my current rate was, and said I wanted them to give me the lower rate advertised on their website.

I braced myself for an argument. I had the maths written out. I had a little spiel prepared about "having no choice but to switch to a cheaper lender".

But after a minute of typing the customer support worker simply said they had forwarded my request to the retention team. "You should have your rate adjusted within 3 business days."

And that was that. I got an email the next day confirming I was now on my lender's lowest applicable rate. The hardest part was remembering my phone banking password.

How can borrowers avoid getting caught out by their lenders?

One thing you can do is to regularly check interest rates on the market, and your own lender's website to make sure your rate is still competitive.

Unfortunately there's nothing stopping your lender from offering better deals to new customers and leaving you on a higher rate. While many lenders will drop rates if you ask, you have to actually ask.

Currently, the only lender who promises to give all customers the same interest rate for the same loan is Athena.

"Aussie homeowners feel that their lender is taking advantage of them and are fed up," said Athena CEO Nathan Walsh. "The loyalty penalty rort costs customers billions of dollars a year. We think it's time for this practice to stop."

Sanghera said that borrowers who have a mortgage broker also have an advantage. "The beauty about having a broker is that they will review your rates for you and keep your rate competitive. If your bank or product gets expensive they'll recommend you move."

But you can also do what I did and just go directly to your lender. Honestly it only took me 20 minutes, and most of that was waiting on hold.