Recent figures show Australian home loan borrowers are paying an extra $2.7 billion a year in repayments by sticking with the big banks*. But despite these home loans having higher interest rates, exorbitant fees and being rated lower in value than 60 other home loans*, around 90 per cent of Australian home loan holders are still settling for loans with one of the big four banks.

Home loan specialist Kevin Sherman from MyRate.com.au says by accepting a bad deal from a big-name bank, borrowers are individually missing out on thousands of dollars each year.

“But there is something you can do about the poor deal offered by the big banks; give yourself an interest rate cut and take your business elsewhere,” said Sherman. “June 25 marks the third annual MyRate.com.au Check Your Home Loan Day – a day when we remind all Aussie borrowers to devote twenty minutes to review their current home loan arrangements.”

“Australia is now used to checking smoke detectors in their homes when day-light savings finishes. So when its time to start working on your tax, we urge you to check your home loan to ensure you’re getting the best deal. Think of it as an annual health check. We spend hours checking mobile phone plans, best travel prices, etc, but the biggest savings consumers can achieve are most likely associated with their home loan,” he said.

CHECK YOUR HOME LOAN CHECK LIST

• Are there home loans with a lower interest rate than my current rate?

• Are there more flexible home loans allowing unlimited additional repayments and redraws with no fees?

• Are there home loans with fewer fees?

• Am I coping with repayments and do I want to consider reducing them by extending the loan term or reducing my interest rate?

• Can I manage my loan online or by phone and access features like BPay and direct debit/salary crediting?

• Am I happy with my finance institution’s customer service?

Kevin Sherman says concerns about the stability of reputable non-bank lenders could be holding some borrowers back from making the switch. He says direct lenders that are continuing to weather the financial crisis are actually funded by major financial institutions.

“It’s time for consumers to take control of their finances and get a better deal. By way of example, the average standard variable rate home loan from the big four banks has a comparison rate almost one percent higher than MyRate’s. Switching could mean a saving of over $100,000 on a $300,000 loan over 30 years,” said Sherman.

On June 25th, My Rate will feature a Refinance Centre on their website at www.myRate.com.au that shows how much money could be saved if you refinanced your loan. And for those wishing to keep making the same monthly repayments, how much sooner you could have your home loan paid off by reducing the interest rate of your home loan.

* Australians borrowers ignore best loan deals – News.com.au (Herald Sun) 18 June 2009.