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

Dom Saric
November 3, 2024
Mike Parsons went above and beyond to ensure that our refinancing journey was painless and successful. He was communicative, accessible (even working while on holidays!), and his knowledge of the systems at play meant that he picked up on things that other brokers missed. Would 100% recommend Mike, and will definitely be back next time we need a broker.
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Ashleigh Breaden
October 31, 2024
Mike Parsons handled our refinance of our home loan with ease and a depth of knowledge that ensured we got the best deal possible for our situation. We didn't have an easy one to solve for with my husband being self employed and we were consolidating finances as well for a car loan. But Mike handled it all for us and once we had provided him with all the documents we literally didn't have to do a thing after that, it was so easy and so quick we are super happy with the experience! Top notch! Highly recommend!!
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Kyle Richards
October 10, 2024
Absolute legend, helped me through the first home buyers scheme, explained everything in a way that made sense, was very knowledgeable and a joy to work with.
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Chloe S
October 8, 2024
Mike Parsons made it possible for us and the in laws to get 2 pretty complicated home loans. He helped us through everything and we'd be happy to use Mike and the team again for anything we needed. Thanks again!
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Sam Rezai
October 2, 2024
I have gone through 6 different mortgage brokers prior to meeting Andrew Wyers. He is the most patient mortgage broker I’ve encountered and also the most knowledgable about the bank’s lending process and products available. It took me 1 year to find a house I was happy with and Andrew was always there to assist with any issues or questions I had; he always return my phone call, even on the weekends or when his away on holidays. The loan process was smooth and I had no complications. The process with Andrew was again nice and easy, he took the time to find and put together the right package that was suited to my situation. I have recommended Andrew to my family & friends and everyone have been grateful and completely satisfied with his service.
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S Wilko
September 23, 2024
I had not dealt with Scott or UNO before finding them on the internet. Even as an Australian citizen living and working overseas, I knew obtaining a loan would be difficult. However, Scott went above and beyond what I expected from a mortgage broker. I genuinely don’t think you could find another company that works as hard as they did to get my home loan approved. I cannot recommend them highly enough. Everyone I dealt with at UNO were extremely professional and helpful. If you are looking for a broker, you would be mad not to give them a go. Thanks to Scott Wilkinson, Dalby Bajwa, Jena Lasquite and Andrew Pacini. Shaun.
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Shan Liao
September 3, 2024
I had an outstanding experience with Tian Liu. He was incredibly professional and attentive, going above and beyond to meet my needs. His expertise and dedication made the entire process smooth and stress-free. Tian's deep knowledge of the market and commitment to finding the best solutions for his clients truly sets him apart. He was always available to answer my questions and provided invaluable guidance throughout. I highly recommend Tian Liu to anyone in need of a reliable and skilled broker!"
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Nathanael Chin
September 3, 2024
Tian Liu provided exceptional service throughout the entire process. His professionalism and keen attention to detail were evident from the start. Tian consistently kept us informed and offered insightful advice that made us feel confident in our decisions. He truly cares about his clients and works tirelessly to ensure the best possible outcome. We couldn't be happier with his assistance and highly recommend Tian to anyone looking for a trustworthy and knowledgeable broker.
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Patrick Winters
August 14, 2024
For the past three years, it has been an absolute pleasure to work with Mike Parsons. He has consistently helped us navigate commercial property loans with skill and efficiency. Mike’s timely and professional responses to our inquiries have been invaluable. We have built a strong, reliable relationship with him and eagerly anticipate continuing our collaboration in the future. We highly recommend his services.
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Lee Robibaro
August 6, 2024
I am so thankful and grateful to have Scott Wilkinson as my broker. He not only looked after me every step from start to finish he gave me confidence and I was able to trust him and his expertise. My children and I are now happy in our new home and very appreciative of Scott's help. I will definitely be only having Scott as my broker from here onward as there is no mucking around and straightforward answers. Thanks again
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Steve Mav
August 6, 2024
Scott and the whole team at uno have been amazing. Super responsive and helped us achieve a result that we couldn’t have possibly achieved on our own.
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Thien Pham
August 5, 2024
Scott, Dalby and Jena were awesome to work with for my recent Home Loan, they are responsive and knowledgeable - which helped ensure a smooth purchase from pre-approvals to settlement. This is the second property I've purchased with UNO as my mortgage broker and would definitely recommend their services. Thanks again to the UNO Team for the awesome support.
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