10 Home Loan Tips That Could Save You Thousands in Australia (2026)

The average Australian home loan is now $736,259 — a record high according to the ABS. The RBA raised the cash rate three times in 2026 (February, March and May), pushing variable mortgage rates higher. Meanwhile, Finder data shows the gap between the average variable rate in their database (6.84%) and the lowest available rate (5.35%) represents a potential saving of $708 per month — or $8,496 per year — on a typical loan. Here are 10 practical tips to make sure you're not paying more than you need to.

1. Check Your Current Rate Right Now

This is the single most important thing you can do today. Log into your bank's app or check your most recent mortgage statement. Find your current interest rate. Then go to Canstar, Finder or RateCity and search for comparable loans.

If the best available rate for your loan type is more than 0.3% below your current rate, you are overpaying. The loyal customer penalty is real — lenders consistently offer better rates to new customers than existing ones. On a $600,000 loan, 0.5% extra costs approximately $3,000 per year.

2. Call Your Bank Before You Do Anything Else

Before refinancing — which involves paperwork, credit checks, and switching costs — call your current bank's retention team and ask for a rate review. This takes 20 minutes and costs nothing.

The script: "I've been reviewing my mortgage and I've seen comparable loans at [rate] with [lender]. I'd like to stay with you, but I need a more competitive rate. Can you offer me a rate review?"

Banks have pricing teams with authority to reduce your rate by 0.2–0.5% immediately to retain a customer. Many will do so rather than lose you to a competitor. This single phone call can save $1,500–$3,000 per year with zero switching costs.

3. Understand When Refinancing Makes Sense

If your bank won't move on your rate, refinancing to a new lender is the next step. It makes financial sense when:

• The new rate is at least 0.4–0.5% lower than your current rate
• You have at least 20% equity in your property (to avoid LMI on the new loan)
• The annual saving exceeds the switching costs within 12–18 months
• You're not on a fixed rate (breaking a fixed rate triggers break fees)

Typical switching costs: $500–$1,500 in discharge fees, application fees and legal costs. On a $600,000 loan with a 0.5% rate reduction saving $250/month, switching costs are recovered in 2–6 months. After that, you're ahead by $3,000/year.

Refinancing usually takes 4–6 weeks from application to settlement. Use the government's free MoneySmart mortgage switching calculator at moneysmart.gov.au to confirm the numbers for your situation.

4. Make Extra Repayments — Even Small Ones

Extra repayments directly reduce your principal and the interest calculated on it. The compounding effect is significant:

• Extra $100/month on a $600,000 30-year loan at 6.5%: saves $62,000 in interest, cuts term by 2.5 years
• Extra $300/month: saves $155,000 in interest, cuts term by 6 years
• Extra $500/month: saves $220,000 in interest, cuts term by 8.5 years

When rates drop — or if you receive a bonus, tax refund or windfall — keep your repayments at the higher level. The extra goes directly to principal reduction.

5. Use an Offset Account Properly

An offset account is a transaction account linked to your mortgage where every dollar reduces the principal your interest is calculated on. The effective return is your mortgage rate — currently 5.5–6.5% — which is tax-free (unlike savings account interest which is taxable income).

To use it properly:

• Have your salary paid directly into the offset account
• Use a credit card (paid off monthly in full) for day-to-day spending — your salary sits in the offset longer, reducing interest
• Keep your emergency fund in the offset rather than a separate savings account
• Never withdraw from the offset for discretionary spending — treat it as untouchable

A household with $50,000 in an offset account on a 6.5% mortgage saves $3,250/year in interest — more than most savings accounts pay, with no tax implications.

6. Switch to Fortnightly Repayments

Switching from monthly to fortnightly repayments is one of the simplest, least-noticed ways to reduce your loan term. Because there are 26 fortnights in a year (not 24), you effectively make one extra monthly repayment per year without noticing the difference in your weekly budget.

On a $600,000 30-year loan at 6.5%, switching to fortnightly repayments saves approximately $60,000 in interest and cuts the loan term by 4 years. Call your bank and ask to switch to fortnightly repayments — it's a free change that takes one phone call.

7. Review Your Loan Features and Fees

Many Australians pay for mortgage features they don't use. Common ones to review:

• Package or annual fees: Some loans charge $350–$400/year for a "package" that includes an offset account and credit card. If you're not using all the features, a no-fee loan with a separate offset may be cheaper overall.
• Redraw vs offset: If your loan has a redraw facility but no offset, consider whether refinancing to get an offset account is worth the switching cost. For large savings balances, it often is.
• Fixed vs variable: With the RBA raising rates in 2026, consider whether a partial fixed rate provides useful certainty. Splitting your loan (part fixed, part variable) can balance rate security with flexibility.

8. Use Windfalls Strategically

Tax refunds, bonuses, inheritance, and any unexpected income should go directly into your offset account or as a lump sum repayment on your mortgage. The impact of lump sum repayments early in a loan term is disproportionately large because interest is calculated on the outstanding balance.

A $5,000 lump sum repayment in year 3 of a $600,000 30-year loan at 6.5% saves approximately $18,000 in interest over the life of the loan — a 3.6x return on the initial amount.

9. Don't Automatically Refix at Your Current Bank

When a fixed rate period ends, your loan rolls to your lender's standard variable rate — which is almost always their highest rate. Banks count on customers automatically refixing without shopping around. Instead:

1. Note your fixed rate expiry date 3 months in advance
2. Get comparison quotes from at least three lenders before your rate expires
3. Use those quotes to negotiate with your current bank
4. If they won't offer a competitive rate, refinance before the fixed period ends

10. Consider a Mortgage Broker

A licensed mortgage broker can access rates from 30–40+ lenders simultaneously and has access to lender-specific pricing tools that aren't available to the public. Brokers are paid by the lender (not you) and are legally required to act in your best interests under the Best Interests Duty introduced in 2021.

Brokers are particularly valuable when: you're self-employed, have a complex income situation, have had credit issues in the past, or want to compare a large number of options quickly. For straightforward refinancing, comparing online via Canstar or Finder and contacting lenders directly is usually sufficient.

How Much Could These Tips Save You?

Tip	Potential Annual Saving
Negotiate rate with current bank	$1,500–$3,000
Refinance to lower rate	$3,000–$8,500
Switch to fortnightly repayments	~$2,000/yr equivalent over loan life
Use offset account properly	$1,500–$4,000
Make $200/month extra repayments	$100,000+ over loan life

The first action — calling your bank to negotiate — is free, takes 20 minutes, and can save thousands per year. Do it today. For more detail on the refinancing process specifically, see our complete guide to saving money on your home loan.

Note: This article is for general information only and does not constitute financial advice. For advice specific to your situation, consult a licensed mortgage broker or financial adviser.