A survey for Ernst & Young by Quantum Market Research found that 65% of borrowers were looking to be rewarded for loyalty with lower fees and better rates.

However, a third of potential switchers admitted that they gave up because there were too many choices to wade through and because the information was too complex. In other words, homeowners would like a better deal, but many of them find the hunt for one to be too hard or that they lack the time the hunt requires.

So, do you ever wonder if you are getting the best deal on your mortgage?

There is always fierce, ongoing competition between lenders in the home loan market, and the clear winner emerging from this constant battle is you.

Even though you compared your options and secured the best deal a few years ago when you got your loan, that doesn’t mean your interest rate is still the best you can do, or even close to it.

By refinancing with another lender, you could save money and get back a lot of time by paying your loan off sooner. Many borrowers who refinance are able to save as much as 1% off their interest rate, which could mean paying that loan off several years earlier than planned.

If you haven’t reviewed your options for a while, it can pay to speak with your Mortgage Broker and find out if the grass really could be greener on the other side. It could make all the difference if you genuinely want to pay your loan off sooner and save money in the process.

As the Ernst & Young survey highlights, many borrowers believe they are currently getting a raw deal. According to the Australian Economic Record, Australian banks have passed on an average of 116% of each rate rise to their borrowers, but they only pass on 84% of each rate cut. This reluctance of lenders to pass on the full benefit of official interest-rate cuts to borrowers amplifies this “raw deal” sentiment.

Quite simply, the best reason to switch is to get a better deal, allowing you to pay your house off earlier. You might also consider refinancing so you can bundle your personal debts, such as credit cards, store cards, car loans, and personal loans, into your home loan. While this is usually a smart move—it will slash the amount you fork out in these other interest payments—it won’t help you pay your mortgage off sooner unless you keep your repayments where they were across all your debts before the refinance.


Case Study: it pays to ask!

Here is a real home owner that a member of my team recently helped out.

We reduced their interest rate by 1.03%. This saved them a massive $23,115.77 every year for the life of their loan.

Not only that, we corrected the structure of their home and investment borrowings to also give them an annual tax deduction of $6,960 every year that they otherwise wouldn’t have received.

Not everyone can get savings like this – the bigger your loan the greater the savings that can be achieved – but it’s extremely rare that we don’t produce a substantially cheaper setup for our clients.


Case Study: a good reason to switch

Here is another of many past clients we have helped.

We cut their interest rate by 0.55% by switching them to a new lender, in this case a discount offer from a Big 4 Bank. This reduced their monthly loan repayments by $458.33 for the life of their loan.

In fact, if they keep their repayments at the same level they were already paying them at; they will save $148,457 and be mortgage free 3 years and 9 months sooner. Or they may decide to use that money to start investing and build wealth for the future.

Either way, they are now massively better off and no longer throwing $458.33 away every month on pointless extra interest.