Four in five home borrowers make $87,000 mistake

Mozo

14 Jun 2021

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There is an easy way to potentially save thousands on your home loan, but surprisingly, most Aussies ignore it. Four in five borrowers take out a home loan with a Big 4 bank, instead of shopping around for cheaper loan. This mistake is costing us big time.

Research from Mozo reveals that the difference between the average home loan rate from the big banks and online lenders is a whopping $87,522 on a $400,000 home loan over 30 years. Why the difference? Well for starters, online lenders have lower costs than bricks and mortar banks so they can pass these savings onto borrowers in the form of lower interest rates and fees.

Right now, you can compare online and challenger lenders on Mozo with rates starting from below 2.00%. So, if you'd like to compare and see if you can save, read on for our run down on five of the top online and rival lender home loans on the market right now.


Bank Beating Home Loans: June 2021

loans.com.au Smart Booster Home Loan
loans.com.au
  • 1.85% discounted variable rate for 2 years

  • Rolls over to low ongoing 2.25% (2.21% comparison rate*)

  • Optional offset account plus free redraws and extra repayments

Our verdict:

This attention grabbing home loan from popular online lender loans.com.au is designed to help you boost your savings, build your equity and own your own home sooner. With flexibility at its core, it features unlimited free extra repayments and redraw, multiple loan split options and an optional offset account for 0.10%. Plus, there are no ongoing monthly or annual fees. Available to borrowers with a 30% deposit for loans of up to $1 million.

Where do I get it? Head over to loans.com.au to find out more >>

Bank of Queensland Discount Fixed Rate
Bank of Queensland
  • 1.89% 2 year fixed rate (3.05% comparison rate*)

  • Bonus $3,000 cashback for refinancers - Apply by 27 June

  • Mozo Experts Choice Best Fixed Rate Home Loan 2021

Our verdict

BOQ is a favourite with borrowers looking to find value outside of the big four banks, and for good reason. The BOQ Discounted Fixed Home Loan lets you lock in a super low rate for two years while still having the flexibility to pay down your mortgage faster with free extra repayments of up to $5,000 a year. Plus, refinancers who apply before 27 June can score a bonus $3,000 cashback. Minimum loan size $250,000, 80% LVR or less.

Athena Celebrate Variable Home Loan
Athena
  • New 1.99% variable and comparison rate*

  • Mozo Experts Choice Home Loan Innovation Winner 2021

  • Minimum 60% LVR

Our verdict:

The Athena Variable Home Loan is one of the best value home loans to hit the market for borrowers with at least 40% deposit or equity. This mortgage features a killer variable rate that stays great from start to finish and zero upfront or ongoing fees. On top of that, to reward borrowers for paying down their home loan, Athena will now automatically lower your rate as you pay down your loan. Available to home buyers and refinancers buying an established property in a capital or major regional city.

Where do I get it? Head over to Athena to find out more >>

UBank UHomeLoan
UBank
  • 1.75% fixed rate for 1 year (2.31% comparison rate*) – Apply by 30 June

  • Free extra repayments up to $20,000 p.a.

  • Zero ongoing fees

Our verdict:

Fixed rates don’t get much lower than UBank’s new 1-year fixed rate. Owner-occupier borrowers will be able to grab this limited time only rate on loans between $100,000 and $2,000,000 and while there is an initial $395 application fee to consider, there are no other fees to worry about. UBank even lets customers make extra repayments towards the loan of up to $20k per year, for free!

Yard Variable Home Loan Special
Yard
  • 1.99% variable rate (2.02% comparison rate*) - Apply by 31 July

  • 100% offset account option + free extra repayments and redraw

  • Available to borrowers with 30% equity in their property

Our verdict:

Looking for a home loan that could save you thousands without having to sacrifice flexible features like an offset account and redraw facility? Look no further than the variable home loan from competitive new online lender Yard. This home loan ticks all the boxes, with an ultra low rate for borrowers with a 70% LVR plus unlimited additional repayments, free redraw, a 100% offset account for an extra $10 a month, and a simple online application that makes it easy to apply.

Where do I get it? Head over to Yard to find out more >>

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home loans Awards

Want to compare more home loans? View the latest mortgage rates from over 80 lenders at Mozo's home loan comparison hub.

Editor's note: Savings calculated on average big 4 bank variable home loan rate of 3.53% vs average 2.40% variable rate from online lenders. $400,000 home loan over 30 years, 80% LVR.

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