5 things the banks don’t want you to know about home loans

Rates and Fees verified correct on December 10th, 2016

In a competitive landscape, there are multiple ways to get the best value-for-money from your mortgage. Here’s some classified information that the banks would like to keep on the down low.5 things the banks don't want you to know about home loans 2

The Australian home loan market is both competitive and saturated, and as a borrower you have leverage when it comes to getting the most out of your home loan and minimising your repayments, fees and interest charges. With some comparative research and due diligence, you can become more savvy in the way that you manage your home loan in order to reap the benefits of useful features that are available on the market.

Here are 5 things that your lender doesn’t want you to know.

1. Rates are negotiable

One of the biggest things your bank doesn’t want you to know is that you have the right to ask for a rate discount, and that negotiating a better rate is straightforward. If you’ve noticed that your lender is offering a discounted rate to new customers, or that other lenders are providing a more competitive rate, you should simply contact your current lender and request a rate discount.

Most lenders have customer service teams that are focused on retaining your business, and you’d be surprised at how many lenders will be willing to budge in order to keep your account-- all you have to do is ask.

While the banks don’t want you to know how easy it is to negotiate for a better rate, they also don’t want you to know just how much you can save. Even a 0.5% rate reduction could lead to big savings.

To demonstrate, if you took out a $500,000 mortgage at 5.5% interest over 30 years, your monthly repayments would be $ 2,838.95. If you then contacted your existing lender and asked for a 0.5% rate discount, your monthly repayments would shrink to $ 2,684.11- a monthly saving of $154, or $1,848 per year.

2. It’s easy to refinance

Lenders are tight-lipped about the ease of refinancing to another lender (which is why the above holds true-- they would rather negotiate your rate than loose your account altogether). Although it’s essential that you carefully evaluate the switching costs involved when refinancing to a new lender, quite often refinancing can lead to significant cost savings in the form of a lower rate or more suitable features.

Learn more about the refinancing process and use our switching cost calculator to see if switching to a new lender would make financial sense for you.

3. Bi-monthly is better

While you may be aware that making additional repayments and using an offset account can help you pay down your mortgage sooner, most lenders don’t want you to know that if you make bi-monthly repayments (as opposed to monthly) repayments, you could pocket a sizeable saving.

To illustrate, if we take a $350,000 mortgage with 5.5% interest, if you made bi-monthly repayments rather than monthly repayments, you would save $72,631 in interest and you would pay down your mortgage 5 years and 1 month earlier-- the numbers speak for themselves.

The difference in interest paid

Interest paid bi monthly 3

The difference in loan length

Time left to pay bi monthly 3

4. Fees are not mandatory

Another untold secret of the home loan industry is that there are many home loans available without standard fees such as discharge fees, application fees or ongoing account-keeping fees. Evidently, your lender would prefer that you didn’t know this.

It’s worth shopping around for a home loan that offers minimal ongoing or discharge fees so that you can focus on meeting your repayments. In particular, if you’re thinking of locking in your rate for a fixed term, you should be wary of lenders that will charge hefty break fees.

If you’d like to minimise your account-keeping fees, compare home loans that waive ongoing fees.

5. Specialist lenders can help

If you have an undesirable credit history or you’re receiving government benefits, most of the big banks are hush-hush about the number of niche lenders and building societies that may have more lenient lending criteria. Why do the big banks want to keep this classified? Because they’d rather charge you a higher interest rate (to compensate for your poor credit history) than have you run to a competitor that may be more forgiving about your credit status.

A mortgage broker can be highly useful in terms of drawing upon a diverse range of lenders to find one that will suit your borrowing needs, especially if you are a non-conventional borrower.

Now that you know what the banks don't want you to know, compare current refinancing deals below

Rates last updated December 10th, 2016.

CUA Kick Start Variable Home Loan - 2 Years Introductory (Owner Occupier)

Comparative rate decreases by 0.03%

November 29th, 2016

UBank UHomeLoan Variable Rate - Standard Variable Rate (Investor with Investor Extra Offer P&I)

Comparative rate decreases by 0.10% | Interest rate decreases by 0.10%

December 2nd, 2016

UBank UHomeLoan Variable Rate - Standard Variable Rate Value Offer (Owner Occupier P&I)

Comparative rate increases by 0.10% | Interest rate increases by 0.10%

December 2nd, 2016

View latest updates

Jodie Humphries Jodie
$
Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
3.74% 3.74% $0 $0 p.a. 80% Go to site More info
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.
3.55% 3.57% $0 $0 p.a. 90% Go to site More info
loans.com.au Essentials - Variable Refinancers Only (Owner Occupier, P&I)
A low-interest rate loan suited for refinancing with no application or ongoing fees.
3.59% 3.61% $0 $0 p.a. 80% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed ($150K+ Owner Occupier)
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.59% 4.42% $0 $375 p.a. 85% Go to site More info
ANZ Breakfree Package Home Loan - 2 Year Fixed (Owner Occupier) $150k+
This 2 year fixed ANZ Breakfree Package rate comes with package discount and product bundle. Terms and conditions, package fee and fees, charges & eligibility criteria apply.
3.75% 4.62% $0 $395 p.a. 95% Go to site More info
ClickLoans The Online Home Loan - Owner Occupier ≤ 80% LVR
Enjoy a competitive interest rate when you have a deposit of at least 20%.
3.69% 3.69% $0 $0 p.a. 80% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier)
A fixed rate package loan with flexible repayments options. 250,000 Velocity Frequent Flyer point offer, conditions apply.
3.75% 4.87% $0 $395 p.a. 95% Go to site More info
Bank Australia Basic Home Loan - Variable (Owner Occupier)
A competitive variable that allows borrowers to borrow from a minimum of $100,000 and $0 ongoing fee.
3.59% 3.60% $0 $0 p.a. 80% Go to site More info
CUA Kick Start Variable Home Loan - 2 Years Introductory (Owner Occupier)
Borrow up to 90% LVR and enjoy an introductory rate for the first 2 years.
3.69% 3.87% $600 $0 p.a. 90% Go to site More info
State Custodians Standard Variable Spring Special - LVR 80% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.59% 3.92% $0 $299 p.a. 80% Go to site More info
Australian Unity Kick Starter Home Loan
$0 ongoing service fees, maximum 80% LVR and a linked transaction account.
3.79% 3.82% $600 $0 p.a. 80% Go to site More info
ME Bank Flexible Home Loan Fixed - 3 Year Fixed Rate (Owner Occupier)
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
3.84% 4.66% $0 $0 p.a. 95% Go to site More info
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier)
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.74% 4.12% $0 $395 p.a. 95% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
A competitive budget rate without any unwanted bells and whistles.
3.87% 3.92% $445 $0 p.a. 90% Go to site More info
Switzer Home Loan
No upfront or ongoing fees and a competitive variable rate for owner occupiers.
3.89% 3.89% $0 $0 p.a. 90% Go to site More info
State Custodians Standard Variable Spring Special - LVR 90% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.69% 4.02% $0 $299 p.a. 90% Go to site More info
3.94% 4.33% $0 $395 p.a. 90% Go to site More info
Greater Bank Ultimate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A discounted rate with 100% offset account. NSW, QLD and ACT residents only.
3.89% 4.27% $0 $375 p.a. 85% Go to site More info
Bank Australia Premium Home Loan Package - 2 Year Fixed (Owner Occupier) LVR < 80%
Buy a new home even if you haven't yet sold your existing one with the bankmecu Bridging Loan
3.69% 4.24% $0 $350 p.a. 95% Go to site More info
IMB Accelerator Home Loan  - LVR <=80% $300k+ (Owner Occupier)
A two year discounted rate which reverts to an ongoing life of loan discount afterwards.
3.64% 4.39% $445 $0 p.a. 80% Go to site More info
Greater Bank Great Rate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A competitive rate with redraw facility. NSW, QLD and ACT residents only.
3.89% 3.89% $0 $0 p.a. 85% Go to site More info
ClickLoans The Online Investor Home Loan - LVR <70%
An investment home loan with competitive rate and 100% offset account.
3.79% 3.79% $0 $0 p.a. 70% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 2 Year Fixed ($150K+ Owner Occupier)
Discount off an already competitive 2 year fixed rate for loans over $150k. NSW,QLD and ACT residents only.
3.74% 4.40% $0 $375 p.a. 85% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Years Fixed (Owner Occupier)
Enjoy a low interest rate and borrow up to 95% (with LMI) of your home value.
3.99% 4.81% $0 $0 p.a. 95% Go to site More info
AMP Essential Home Loan  -  Owner Occupier
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
3.98% 4.00% $350 $0 p.a. 90% Go to site More info
Bank Australia Premium Home Loan Package - LVR<=80% $700k + (Owner Occupier)
Enjoy the discounted interest rate with redraw facility and no ongoing fees.
3.74% 4.09% $0 $350 p.a. 95% Go to site More info
Beyond Bank Low Rate Special Home Loan
A special low variable rate for Owner Occupier with 100% offset account and no application or ongoing fees.
3.73% 3.73% $0 $0 p.a. 70% Go to site More info
Switzer Fixed Rate Home Loans - 2 Years Fixed Rate
A competitive 2 year fixed rate with your very own lending service manager.
3.97% 3.99% $0 $0 p.a. 80% Go to site More info
Australian Unity Health, Wealth and Happiness Package - (Owner Occupier)
Get a 0.60% discount on your rate, a 100% offset account and no ongoing fees.
3.99% 4.02% $600 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 1 Year Fixed (Owner Occupier)
Get a short term fixed rate for that investment property with no application or ongoing fees.
3.99% 4.90% $0 $0 p.a. 95% Go to site More info
CUA Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier)
A fixed home loan with no ongoing fees and flexible repayments options.
3.69% 4.56% $600 $0 p.a. 95% Go to site More info
loans.com.au Fixed - 2 Year Fixed (Owner Occupier)
Another low interest rate offer from loans.com.au. No application fee to pay.
3.89% 3.72% $0 $0 p.a. 90% Go to site More info
3.89% 3.89% $0 $0 p.a. 80% Go to site More info
Switzer Investment Loan
An investment loan with no application or ongoing fees, and your very own lending service manager.
4.09% 4.09% $0 $0 p.a. 80% Go to site More info
IMB Essential Home Loan - LVR < 80% (Owner Occupier)
100% offset account, unrestricted additional repayments and no monthly account keeping fees
4.09% 4.09% $0 $0 p.a. 80% Go to site More info
ME Bank Flexible Home Loan Fixed - 2 Year Fixed Rate (Owner Occupier)
No application or ongoing fees and a competitive 2 year fixed rate.
3.84% 4.75% $0 $0 p.a. 95% Go to site More info
NAB Base Variable Rate Home Loan - Owner Occupier (P&I)
A competitive no frills home loan with no application fees for a limited time. 250,000 Velocity Frequent Flyer point offer, conditions apply.
4.10% 4.14% $0 $0 p.a. 95% Go to site More info
Commonwealth Bank Wealth Package Fixed Home Loan - 2 Year Fixed (Owner Occupier)
Fee free extra repayments available during the fixed term. $1,250 cash back offer for refinancers. Conditions apply.
3.99% 5.00% $0 $395 p.a. 95% More info
Suncorp Home Package Plus Fixed - 3 Year Fixed Rate (Special Offer $150k+ LVR <=90% Owner Occupier)
Lock in a special offer rate for 3 years for loans over $150k with LVR below 90%.
3.64% 4.26% $0 $375 p.a. 90% More info
St.George Fixed Rate Advantage Package -  2 Year Fixed Rate (Owner Occupier)
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cash back available for refinancers, conditions apply.
3.99% 5.07% $0 $395 p.a. 95% More info
Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years
A low interest rate home loan and competitive two year fixed rate.
3.99% 4.97% $0 $395 p.a. 95% More info
St.George Basic Home Loan - Promotional Rate (Owner Occupier, P&I)
A no frills loan with a competitive rate and a maximum LVR of 95%.
4.08% 4.09% $0 $0 p.a. 95% More info
Westpac Flexi First Option Home Loan - 3 Years Introductory Special Offer (New Owner Occupier, P&I)
A limited time deal for new owner occupiers. Advertised rate includes 1.03%p.a. discount for the first two years.
3.99% 4.37% $0 $0 p.a. 95% More info

Enter your details to speak to a broker from Aussie

Terms and conditions

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a partly owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. © 2016 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786. Credit services for Aussie Select and Aussie Optimizer products are provided by AHL Investments Pty Ltd ACN 105 265 861 ("Aussie") and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133. Credit for Aussie Optimizer products is provided by Perpetual Ltd ACN 000 431 827.

By submitting this form, you agree to the finder.com.au privacy policy and the Aussie privacy policy.

Aussie Home Loans Logo

Aussie’s Mortgage Brokers can save you time and effort by helping you research, organise and apply for your home loan, at no cost to you. They compare hundreds of home loans to help find the right deal for you. Fill out the form on the left and an Aussie Mortgage Broker will meet you at a time of your choosing to discuss your needs and help you find the right loan.

Aussie Home Loans Lender Logos


Many Australian lenders keep their cards close to their chest when it comes to helping customers save money on their mortgage. Understanding the market and how home loans function, as well as a few tricks of the trade can help you ensure that you’re managing your mortgage in your favour (and not the lenders).

Image: Shutterstock

Belinda Punshon

Belinda is a journalist here at finder.com.au. Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

Was this content helpful to you? No  Yes

Related Posts

HSBC Home Value Loan - Resident Owner Occupier only

Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.

ME Bank Basic Home Loan - LVR <=80% Owner Occupier

A low variable rate loan with no application or ongoing fees.

NAB Choice Package Home Loan - 3 Year Fixed (Owner Occupier)

Receive discounts on interest rates with the Choice Package. 250,000 Velocity Frequent Flyer point offer, conditions apply.

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback