Why checking your home loan could be a million-dollar decision

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Home owners could pocket anywhere from $100 to $1 million, just for comparing their mortgage rate.

RateCity.com.au has guaranteed to give $100 to borrowers if it can’t find them a lower interest rate on an equivalent home loan, as part of its It Pays to Check campaign.

Everyone who compares their home loan rate and submits a valid entry will also go into the draw for a chance to win $1 million.

Numerous lenders have slashed their mortgage rates since the Reserve Bank cut official interest rates in early June, many to historically low levels, which means that even without the $1 million incentive, now could be an excellent time to compare your home loan options.

Click here to compare your home loan against Australia’s lowest rates

Here’s why you should think about refinancing

It Pays to Check is also a reminder to Australians that they could potentially save thousands of dollars by refinancing to a lower-rate home loan.

A typical owner-occupier has a home loan rate of 4.30 per cent. (That was the average of all the principal-and-interest variable rates listed on RateCity at the end of May.) By contrast, the lowest P&I variable rate on RateCity, from Reduce Home Loans, has an interest rate of just 3.09 per cent (comparison rate also 3.09 per cent).

Imagine if you had 20 years left on your mortgage – here’s how much you could save by refinancing:

Remaining loan Total repayments at 4.30%* Total repayments at 3.09%* Difference
$400,000 $597,028 $536,749 $60,279
$600,000 $895,543 $805,124 $90,419
$800,000 $1,194,057 $1,073,498 $120,558

* Calculations do not include fees, such as potential break fees, upfront fees and ongoing fees

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