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5 home loan secrets to save you thousands

By ,| 2 min read

Wondering how you could save thousands on your home loan? The answer is simple, reduce the amount of interest you pay.

A recent study by Lendi found that the average Australian household could be missing out on savings of up to $162,458 over the 30-year life of their loan.

Based on the average Australian home loan of $371,100, households could save a whopping $5,412 each year in repayments by negotiating or switching lenders to get the best rate available*.

How much could you save with a lower rate?

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5 secrets that could save you thousands:

#1. Shop around for a better deal

Rates change all the time! It's smart to always make sure you're getting the best deal by comparing lenders. Use an online home loan platform that has all the major banks as well as other non-bank lenders in one place. These days you can compare hundreds of options in seconds. Start your search by answering a few questions here.

Did you know: 79% of Australian online home loan borrowers are finding a better deal with a smaller lender. Read the full story here.

#2. Consolidate high interest debt

Credit cards, car loans and, personal loans typically come with much higher interest rates than home loans. Think about consolidating your higher interest debts into your home loan. Rolling all of your debt into one regular repayment and can help reduce the amount of interest you pay. Use our handy debt consolidation calculator to work out how much you could save.

Try our debt consolidation calculator

Calculate how much you could save by rolling your loans into one.

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#3. Switch to principal and interest payments

Since June 2017, P&I rates have been considerably lower than IO rates across the board. If you can afford to switch to a P&I loan, it's likely you'll pay less in interest over the life of your loan and be debt-free sooner.

#4. Offset account = paying less interest

Offset accounts can be a great way to reduce the amount of interest you pay on your home loan, whilst still retaining your cash flow. You can access these funds at any time and when interest is calculated each day, these funds will offset the home loan balance. This will help reduce the amount of interest you pay on your loan and can save thousands over the life of the loan. Try our handy offset savings calculator.

How much can you save with an offset account?

Find out how much you could save each month.

Calculate savings

#5. Split your risk

Concerned about future rate rises? Get the best of both worlds by locking in part of your home loan with a fixed rate and leaving the remainder at a variable rate. This way you could benefit from the stability of the fixed portion, while the variable portion offers the flexibility to make extra repayments and pay your loan off faster. Learn more about split rate loans here.

Got a home loan question? Ask our experts in the comments below or start a live chat now.

  • Calculation based on rates from 37 Australian banks and non-bank lenders including the Big Four (as at 28 November 2017). The difference between the most expensive interest rate (5.67%) and cheapest interest rate (3.64%) for the average home loan was then aggregated over the life of a 30-year P&I loan. Average home loan size according to ABS, September 2017.

How much can you save by refinancing?

Find out what your new repayments might be in seconds.

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Tags: refinance, saving, debt consolidation, low interest, david hyman

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Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856, Credit Representative 518849), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Aussie business. Our mission is to provide Aussies with the right experience when choosing a home loan from our panel of lenders including ClickLoans, a related body corporate of Auscred Services. Although Lendi compares over 1600 products from over 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 40% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors. We have an independent and founder led board.
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
EXAMPLE: This example is current as at 20th October 2016. A Click Loans Online Principal and Interest Loan of $150,000 over 25 years has monthly repayments of $767. This is calculated based on the interest rate of 3.69%, comparison rate of 3.69%, upfront fees of $0 and annual fees of $0.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
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