Are you paying too much on your mortgage?

Our research shows 52% of Australians aren’t confident they’ve found the best home loan deal for them. Could you be paying too much on your mortgage?

UNO customer and co-founder of an IT recruitment business Bloc Technology, Roman Lenio was not afraid to switch lenders to get a better deal on his two mortgages with his partner. After refinancing their home mortgage and the loan on their investment property (both in Sydney), the couple will now save thousands of dollars a year in interest.

Interviewed by The Sydney Morning Herald last week, Lenio, 37, says switching to a better mortgage deal was well worth it: he shaved 0.2 percentage points off both loans to arrive at rates well under 4%.

Many Australians miss out on savings because they are not prepared to refinance. Our new research shows two thirds of Aussie homeowners have never switched their rate and one in seven would never leave their bank – regardless of how big the discount.

We spoke to 1500 mortgage holders about their satisfaction with their home loan and their switching habits and found out some pretty crazy stuff! Turns out we’re a pretty lazy, loyal and scared nation. We compiled the results in this report: ‘Laziness, loyalty and fear: why Aussies don’t switch home loans’.

Our research found Aussies who have switched their rate are paying 13 basis points less on average than those who haven’t, with the common roadblocks to not switching being loyalty to their current bank or lender, the perceived amount of effort required to switch, and the fear of talking about finances.

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“If you’re unhappy with your current home loan deal but stay anyway, you’re effectively paying an inertia tax,” says UNO founder and CEO Vincent Turner, who advises mortgage holders to shop around every year or two to ensure they’re always getting the best rate.

The cost of not switching

A comparison of interest rates revealed that people who have switched pay an average rate of 4.29% versus the 4.42% interest rate being paid by those who haven’t switched. Say what! On an average $500,000 loan, this equates to someone paying $468 more per year – or $14,040 extra over a 30-year loan. That’s a lot of money. You could buy a brand new watch, fly business class to Europe…

Loyalty

Many Australians are fiercely loyal, spending a long time glued to the same rate and opting for well-known lenders. Nearly half have had their home loan for more than five years, two-thirds have been a customer of their lender for more than five years, and three quarters have their loan with a Big Four bank. On top of this, 15% would never leave their lender – regardless of how big the discount. With 70% of all marriages undergoing an affair at some point, turns out Aussies are more loyal to their bank than their spouse.

Laziness

Laziness is a big factor when it comes to not switching. More than two-thirds of Aussies who haven’t switched say they’ve been turned off by the effort. More than three quarters wouldn’t bother leaving their lender for a 20 basis point discount – a saving that would equate to $700 a year on an average $500,000 loan. Get off the couch, people!

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Fear

Amazingly, many Aussies are more driven by a fear of awkward conversations than they are by saving money. Half of those who admit to not switching say the thought of having their finances reviewed by a third party puts them off. And we thought you were all scared of spiders!

Luckily, with UNO you can do almost everything online – sans the awkward convos. Unlike the veil of mystery put up by many banks, with UNO you can unlock some of the sharpest rates out there by taking about 28 seconds out of your life here.

Misinformation

Fees also put many borrowers off switching, with nearly two-thirds saying that exit fees are a deterrent to switching and saving. This is despite the fact that lenders are no longer allowed to charge exit fees on variable rate loans taken out after 30 June 2011.

“In many cases, people estimate exit fees to be higher than they actually are,” says Turner. “Rule changes have meant that exit fees have come down significantly in the last few years and can end up being only a couple of hundred dollars.

“Interest rates are at historically low levels, so it’s a great time to push through the roadblocks that have prevented you from switching and trade up to a better deal.”

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Are you driven by laziness, loyalty or fear?

If so, it’s possible you’re paying too much for your home loan.

Happily, you can start unlocking potential savings with just a few clicks. So go on – take those 28 seconds we mentioned earlier to plug in a few details to see what you could be saving.

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This information is general in nature and you should always seek professional advice when making financial decisions.



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TESTIMONIALS

What our customers are saying

Marlon Baena
July 22, 2024
Karis dedication to assisting with our home loan, even while I was on holidays, truly exemplifies a commitment to excellent service. It's the small things that often make a big difference, and it seems Karis attention to detail and clear communication were key to our smooth home purchase. I highly recommend using UNO and Karis for your home loan needs.
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Olivia Gill
July 18, 2024
We recently used UNO Home Loans to assist us with securing our new mortgage in AU (had moved here from NZ). We had Michael Parsons as our mortgage broker and he was extremely responsive and helpful the whole way through the process. Was a great experience and definitely recommend :)
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Yash Karma
July 18, 2024
Andrew Wyers and team have been amazing. Andrew is very knowledgeable, offers practical advice and he has been pivotal in helping me secure a mortgage at a very competitive interest rate. He was highly responsive to my queries and,being a new immigrant to Perth, he was very patient with my many many questions. An added benefit for me was his knowledge of how superannuation here works. A hec of a great guy to work with, reliable and he goes above and beyond. I would recommend highly recommended him, especially for new immigrants. In fact, I will be using him again very soon!
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Rosie Deiath
July 2, 2024
Karis from UNO was so supportive throughout the entire process of buying our first home. She was contactable at any time, and answered all our silly questions for us. We couldn't recommend Karis and her team enough, as it always felt like she was in our corner with our best interests at heart.
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Jack Mikkelsen
July 2, 2024
We dealt with Karis Churchill as the mortgage broker for our first home. Karis was so supportive and knowledgeable through the whole process! A+ mortgage broker. Definitely utilise her expertise if you’re buying a house!
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Kapil Baldota
June 25, 2024
Eren Tan is absolutely one of the best mortgage brokers in Melbourne! Keeping us well informed throughout the process. Eren gave us a helpful hand in managing to get our loan over the line in a quick and efficient way which is what we wanted and he delivered on that. Thank you Eren Tan!
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A M
June 21, 2024
I only have praise from my Uno experience! I was a broker sceptic, having done all of the hard work myself for my first two property purchases and sale. I'm now a proud broker advocate having used UNO (Karis Churchill) for two refinances and purchase. The value add Karis brought cannot be underrated! Not only has Karis got me the best rate, with a bonus cash back (nearly unheard of in this climate), she has done it with the least back-a-forth and with the least administrative burden on me (the thing that can deters people from refinancing to begin with). Karis is always on top of everything. Karis knows her stuff. She is the most responsive of any professional service provider I've ever used (my banker never text with an update at 7pm on a Sunday) without being overbearing. You know she's got your back and in my experience the value speaks for itself. Thank you to the whole UNO team, thank you especially to Karis.
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Leanda Cawdry
June 8, 2024
Very pleased with the outcome of this process, Michael Parsons and his team at UNO were helpful, communicative, and took all the stress out of the process of finding me a refinance deal that met my needs. Would definitely recommend Michael and UNO, and I already have!
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Glen Matthews
May 29, 2024
Regarding UNO Home Loan services. I had great experience with uno home loans, Michael parsons was my broker for UNO Home Loans we had excellent communication throughout the whole home loan application. If I had any questions on home loan application which were many were answered in great detail. He had the time to assist me in filling out endless application forms at anytime through the day or night which made the application process stress free. So I would strongly recommend Michael parsons from UNO Home Loans to try his services you will not be disappointed. Thanks to Michael parsons I have the lowest home loan interest rate I could ever hope for which I particularly ask for. It’s was a pleasure working with him. And will be using his services in the near future.
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Gillian Anderson
May 28, 2024
Thank you to Michael and UNO for their help in securing our home loan. I like the way they break everything down in simple terms to ensure that you can make the right decision. Michael was polite and very patient to help us get things across the line. We are now sitting in our first home away from rental circus. Can't recommend them enough. Thanks Michael and thanks UNO
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Andy Song
May 17, 2024
Amy has been absolutely wonderful as a broker. I would not hesitate one bit in recommending her services.
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Troy H
May 13, 2024
Scott Wilkinson did a great job as my broker. He was very patient and always happy to answer my numerous questions throughout the considerable period of time that it took to secure a suitable property. Would certainly recommend Scott and the team at UNO for anyone seeking a broker.
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