If you asked a group of Australian homeowners what their current interest rate is, the majority would not be able to tell you.

It is a surprising fact, but it is entirely understandable. When you buy a house, you spend months looking at numbers, rates and contracts. Once the settlement goes through, life takes over and your mortgage becomes just another automatic payment that leaves your account every month.

Finder found that 54% of borrowers admitted they didn’t know their rate, with 69% of Gen Z borrowers not being aware.

If you’re one of the 52% of borrowers who have never changed home loan providers , there’s a strong chance you may be paying for that lender loyalty.

Australia’s home loan market is extremely competitive and constantly changing. Banks regularly update their offers to attract new business, which often leaves existing customers paying more than they should.

Checking if your loan is still working hard for you does not need to be a stressful or lengthy task. In fact, you can find out exactly where you stand in just 10 minutes. Here is how:

STEP 1: Find your current interest rate

You cannot know if you have a good deal until you know exactly what deal you have. You do not need to call your bank or wait on hold for this. Simply open your banking application on your phone or log into your online banking portal on your computer. Navigate to your home loan account details. Your current interest rate should be clearly displayed alongside your loan balance.

If you cannot find it online, check your most recent mortgage statement. Banks are required to list your interest rate on these documents. Write this number down. This is the baseline you will use to measure your competitiveness.

STEP 2: See what your bank is offering new customers

Now that you have your number, it is time to see how it compares to the wider market. A great place to start is with your own lender.

Open a new internet browser and search for your bank. Look at the interest rates they are currently advertising for brand new customers. Banks operate in a highly competitive environment and they often reserve their lowest rates to bring new borrowers through the door.

If the rate they are offering new customers is significantly lower than the rate you just wrote down, your loan may no longer be competitive. You are essentially paying what the industry refers to as a ‘loyalty tax’ for staying with them without asking for a better deal.

STEP 3: Calculate the potential savings

Understanding the percentage difference is helpful, but seeing the actual dollar amount makes the picture much clearer.

The next step is about doing some math to see how much money you might be leaving on the table. You can use a free online mortgage calculator for this. Try ours:

Enter your current loan balance and your current interest rate to see your monthly repayment. Then, enter the same loan balance but use the lower interest rate you found advertised online.

Let us look at a practical example.

Say your loan size is $736,000. If your current interest rate is 6.5%, your monthly repayments will be $4,652.

If you discover that competitive rates are sitting around 5.9 percent, the difference of 0.6 percent might sound small. But your monthly repayments would be $4,365.42.

That’s a monthly saving of $286.58.

However, applying that lower rate to your $736,000 balance could reduce your repayments by hundreds of dollars every month. Over a couple of years, that adds up to thousands of dollars staying in your bank account instead of going to your lender.

Individual savings will vary. Speak to a YBR mortgage broker for a personalised assessment.

STEP 4: Decide on your action plan

You now know your rate, you know what the market is offering and you know how much money is at stake. The only thing left to do is decide how you want to handle it.

You have two main options. You can call your current bank and ask them to match the new customer rate. Sometimes they will reduce your rate simply because you asked. However, they might not offer you the absolute best deal available in the broader market.

Your other option is to speak with an expert who can look at the entire market for you. A mortgage broker understands the policies, the hidden fees and the true cost of switching loans. They do the heavy lifting to ensure you are matched with a solution tailored to your specific needs.

If you spent 10 minutes today and realised you are paying more than you should be, we are here to help you fix it. Reach out and speak with a local Yellow Brick Road mortgage broker to see if there are better options out there suited to you and your circumstances.