Don’t ask, don’t save: mortgage warning for Aussies

Millions of Australians may be paying more than they need to by not challenging their bank

With cost-of-living pressure biting and fears growing that mortgage stress could worsen, Australians are being warned that one of the simplest ways to save money might also be the one many people avoid: picking up the phone.

New research from comparison site Finder has revealed more than one in three mortgage holders (37 per cent), equivalent to about 1.2 million Australians, have never asked their bank or lender for a better home loan rate and that silence could be costing them dearly.

Finder’s analysis shows even a small difference in interest rates can add up to tens of thousands of dollars over the life of a loan. On a $500,000 mortgage over 30 years, a rate reduction of just 0.5 percentage points could save more than $58,000.

For households already feeling the squeeze from groceries, insurance, energy bills and everyday expenses, experts say negotiating with your lender is no longer something to put in the “too hard” basket.

Don’t assume loyalty pays

Richard Whitten, money and home loans expert at Finder, said many Australians wrongly believe the rate they are given is the best one available.

“There’s a common misconception that the interest rate your bank gives you is the best rate you’re entitled to, but that’s often not the case,” Whitten said.

“Banks know that refinancing has become easier, and they’re often willing to offer discounts to keep good customers from walking away.”

The average Australian home loan is now $734,878 and Finder says a borrower paying a variable rate of 6.95 per cent would face repayments of about $4,865 a month.

Moving to a more competitive variable rate of 5.69 per cent could reduce repayments to around $4,261 — a potential saving of more than $7,000 a year.

Why asking matters

Finder’s survey found only 10 per cent of mortgage holders had asked their lender for a lower rate in the previous three months while another 22 per cent had negotiated six to 12 months ago, and 25 per cent admitted it had been more than a year.

Whitten said the conversation may feel uncomfortable, but the reward can be significant.

“It can feel awkward asking for a better deal, but that five-minute conversation could save you thousands over the life of your loan,” he said.

“The borrowers getting the best deals are often the ones who ask for them. In today’s market, silence can be expensive.”

How to challenge your lender

Homeowners are being encouraged to check their current interest rate and compare it with what their bank is offering new customers.

If there is a gap, call your lender and ask directly whether they can match a better offer. If the answer is no, ask about the mortgage discharge process and consider whether refinancing makes financial sense.

“One of the easiest ways to find extra money may not be earning more, but asking for a better deal on one of the biggest expenses most Australians will ever have,” Whitten said.

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