You could save big when you shop around on interest rates

Shopping around for a home loan rate can be the key to ticking off your bucket list – with potential savings of $100,000 or more up for grabs.

You’ve got plans, hopes and dreams - and they all cost money. However, there is a way to free up cash so you can start ticking off your wish list sooner

The solution can be as simple as shopping around for a great deal on your home loan.

Big savings up for grabs

Home loan interest rates are the lowest in 50 years. But don’t let that stop you checking out different lenders.

Your home loan is probably the biggest financial commitment you’ll ever sign up for, so it’s important to be sure you’ve got a great deal.

Even though interest rates are the lowest in decades, there’s still a big variation in home loan rates across different lenders.

Despite the opportunities to save with a lower rate, seven out of ten home buyers go with a lender they already bank with [1]. That’s a shame because what can seem like a convenient time-saver can turn out to be a big money waster.

With the big banks, for instance, you could pay a home loan rate of more than 5.0% p.a [2]. Or, you could pay less than 3.0% p.a. on some of the home loans available through Mortgage Choice [3].

That’s why it’s worth checking out what’s being offered across a wide selection of lenders. A great rate doesn’t just make your loan repayments easier to live with. It can also see you save a bundle in interest charges.

The savings stack up

What’s really exciting is how a small difference in your loan rate can add up to huge savings over time.

Let’s say you take out a home loan for $500,000 with a rate of 4.5% p.a. Seems pretty reasonable, right?

Not really. At 4.5% p.a., you’ll pay about $310,000 in interest over the life of the loan [4]. Ouch.

So let’s shake things up a little.

By shopping around, you may be able to trim your home loan rate to just 3.0% p.a. That’s only a 1.0% difference in the rate. But watch the savings stack up over time.

On that same $500,000 home loan, paying just 3.0% p.a. can cut your total interest tab to around $197,000 [5]. That’s a saving of more than $100,000 – money going straight into your pocket instead of your banks’.

How will you spend the extra cash?

So what will $100,000 buy you? Let’s see.

Having an extra $100,000 to your name could see you smash weekend brekkies with 40,000 avocados (sourdough not included), hit the highway in style with a new BMW, or rub shoulders with the stars with five first-class return airfares to New York.

Or, you could put the $100,000 saving to work wiping out your HELP debt, chill out with a Netflix subscription for the rest of your life, or open your home to 50 adorable puppies.

Okay, maybe you’re not ready for 50 puppies. But you get the idea.

What would you do with the savings?

Why make your bank rich?

It goes to show that heading straight to your regular bank for a home loan can cost you. Casting your net wide is a strategy that can really pay off.

The trouble is, shopping around and comparing between home loans takes time – something most of us don’t have enough of. When you’re in the market for a new home, you really just want to focus on finding the right property.

That’s where Mortgage Choice makes it easy.

With access to over 20 different lenders, your Mortgage Choice broker will do all the shopping around to be sure your home loan has the features and flexibility you need at the most competitive rate.

Even better, your Mortgage Choice broker’s home loan service comes at no cost to you. We’re paid by lenders, and as Mortgage Choice brokers are paid at the same rate of commission no matter which home loan you decide to go with, you can be confident that you’ll only receive recommendations that are right for your needs.

$100,000 in possible savings? It’s a no-brainer to shop around for your home loan.

Information Centre

To learn more about becoming a First Home Buyer in Australia check out our First Home Buyer Information Centre where you can learn about Saving for a deposit, State Grants and more.



    [3] The lowest available rate on Mortgage Choice’s panel of lenders as of 17/10/2019

    [4] Source: The Mortgage Choice repayment calculator as of 17/10/2019. This is calculated based on a principal and interest loan of $500,000 repaid over a 25 year term with an interest rate of 4.5% p.a. Rates are subject to change.

    [5] Source: The Mortgage Choice repayment calculator as of 17/10/2019. This is calculated based on a principal and interest loan of $500,000 repaid over a 25 year term with an interest rate of 3.0% p.a. Rates are subject to change.

     Closes 30/06/2020. Major Draw 12:00 hours AEST on 1 July 2020 at the office of Engage Australia Level 8,56 Clarence Street, Sydney, NSW 2000. The Winner will be notified by phone and confirmed by email 2 July 2020. NSW Permit No. LTPS/19/38618, ACT Permit No. TP 19/04325, SA Permit No. T19/1660. Terms and conditions apply. Click here.