Why Ignoring Your Home Loan Could Cost You Thousands

For most Australians, a home loan is the biggest financial commitment they’ll ever take on. A mortgage often lasts decades, and the interest bill over that time can be enormous. While people spend a lot of effort comparing lenders when first taking out a loan, many simply set and forget once it’s in place.

That can be a costly mistake. Rates, products, and personal circumstances change. Reviewing your home loan regularly can help ensure you’re not paying more than you need to—and in many cases, the savings can be substantial.

Why Reviewing Your Home Loan Matters

A home loan review is like a financial health check. It’s about looking at your interest rate, fees, and loan features to see if your mortgage still works in your best interests.

Here are the main reasons this matters:

• Rates shift constantly – What was competitive a few years ago may now be well above market rates.

• “Loyalty tax” effect – Lenders often keep their best deals for new customers, leaving long-term borrowers paying more.

• Life circumstances change – Higher income, reduced debt, or increased equity could make you eligible for a better product.

• New products emerge – Offset accounts, redraw, and flexible repayment features may not have been available when you first signed up.

Without regular reviews, you could be paying thousands more than necessary.

Example: The Difference a Review Can Make

Let’s take Sarah, a homeowner with a $400,000 mortgage. Her current interest rate is 6%, which was competitive when she signed up.

Recently, Sarah checked the market and found a “new to bank” rate of 5.34% available for refinancers.

Here’s the difference:

• Loan amount: $400,000

• Term: 30 years

• Rate now: 6% = repayment about $2,398 per month

• New rate: 5.34% = repayment about $2,235 per month

That’s a saving of $163 a month, or nearly $2,000 per year.

If Sarah keeps making her old higher repayments after refinancing, she’ll chip away at the principal faster, saving even more interest and shortening her loan term. Over time, that could mean tens of thousands in savings.

What Does “New to Bank” Mean?

Lenders often advertise special deals for new to bank customers—borrowers who don’t already have a loan with them. These deals are designed to attract new business and are usually sharper than the rates offered to existing customers.

That’s why it’s so important to shop around and be prepared to refinance. Becoming a new customer with a competing lender can often unlock better rates and features than you’d get by simply staying put.

Benefits of Reviewing Your Mortgage

While rate savings are the most obvious, there are several other advantages to keeping your loan under review:

1. Lower repayments and improved cash flowRefinancing to a lower rate frees up money that can go towards other priorities like savings, investments, or family expenses.

2. Paying off your home soonerBy keeping repayments at the same level after refinancing, you reduce your balance faster and cut years off your loan.

3. Access to better featuresModern loans often come with offset accounts, redraw facilities, or more flexible repayment options. These tools can help reduce interest and improve financial control.

4. Debt consolidationHigh-interest debts such as personal loans or credit cards can sometimes be rolled into your mortgage, reducing the overall interest burden.

5. Adapting to life changesWhether you’ve had a pay rise, started a family, or built up equity, a different loan structure may now be a better fit.

6. Negotiating powerEven if you don’t switch lenders, having competing offers in hand can be a strong bargaining chip when asking your current lender for a better deal.

   
   

When Should You Review?

A good habit is to check your loan at least once a year. You should also review when:

• Your fixed rate is expiring.

• The Reserve Bank or lenders have shifted rates significantly.

• Your financial situation changes.

• You’ve built substantial equity in your property.

  
  

Steps for a Smart Loan Review

1. Know your current position – Check your rate, loan balance, and repayment.

2. Compare the market – Look at what’s available for new borrowers.

3. Run the numbers – Use a calculator to check potential repayment savings.

4. Check costs – Refinancing can involve fees, but these are often outweighed by the long-term savings.

5. Seek advice – A broker or finance professional can help compare and manage the process.

   
   

The Cost of Doing Nothing

The real danger in not reviewing is complacency. If Sarah ignored her loan and stayed on 6% for another five years, she’d miss out on nearly $10,000 in savings.

That’s money that could have been directed to her retirement fund, her children’s education, or simply reducing her debt faster.

Final Thoughts

Your mortgage is likely your largest expense, yet many households give it the least attention once it’s set up. By reviewing your home loan regularly, you can make sure you’re getting a fair deal and not paying a “loyalty tax” for staying put.

Whether it’s lowering repayments, accessing better features, or paying off your home sooner, the benefits of a review are real and often significant. A quick check once a year could be all it takes to unlock thousands in savings and bring your financial goals closer.

Ready to see if your home loan is still working for you?

At Etairos Finance, we help clients review their mortgages, compare the market, and uncover real savings. Whether you’re looking to reduce repayments, pay down your loan faster, or access better features, our team can guide you through the process.

Contact Etairos Finance today to book your personalised home loan review.