This couple had purchased their home in Unley four years earlier and had not looked at their mortgage since. They were with one of Australia's major banks on a variable rate of 6.89%. Their remaining loan balance was $720,000 with 22 years left on the term.
They assumed their rate was competitive because their bank was a household name. They had never spoken to a mortgage broker and did not realise how much rates can vary between lenders - or how much loyalty to a single bank can cost over time.
The couple's existing bank had no incentive to proactively lower their rate. They were paying on time every month, and the bank was earning more interest from them than it would from a new customer on a sharper rate. This is one of the most common issues Lendology sees - existing customers subsidising the rates offered to new borrowers.
Australian borrowers who do not review their home loan at least every two years are almost always paying more than they need to. The difference between a competitive rate and a back-book rate can be 0.5% to 1.5% - which on a $720,000 loan is $3,600 to $10,800 per year in unnecessary interest.
Jason ran a full comparison across 40+ lenders on his panel and identified that Macquarie Bank was offering 5.99% for their loan profile - a saving of 0.90% compared to their current rate. Macquarie was also offering a $4,000 cashback for refinancing customers, which would more than cover the legal and settlement costs of switching.
Jason prepared the full application, handled all communication with both the existing lender and the new lender, and managed the discharge and settlement process. The entire refinance settled in just three weeks from the date of the initial conversation.
The net saving after all switching costs was $180,000 over the remaining 22-year term. Monthly repayments dropped by approximately $480, giving the family immediate breathing room in their budget. The $4,000 cashback covered the discharge fee, government fees, and legal costs with money left over.
The couple now has a standing annual review with Lendology to make sure their rate stays competitive. Jason monitors their loan as part of his ongoing service at no additional cost.
We had no idea we were overpaying by that much. Jason made the whole process painless - we barely had to do anything and it was done in three weeks. We only wish we had done it sooner.
Book a chat with Jason or Steve. We will assess your situation honestly and tell you exactly what is possible.