Some recent research by UBank has found more than 8 out of 10 Australians don’t know what interest rate they’re paying on their home loan.

This means people could be paying an interest rate up to 2% more than they need to. Just 2%… doesn’t sound like much?

In August 2015, the average new owner-occupied home loan was $371,200. Let’s look at a some numbers using that figure.

If that amount was paid off with monthly repayments at a rate of 3.99%, the monthly repayment would be $1,770 per month. The total interest bill over the life of the loan would be $266,009.

A rate of 5.99% would see a monthly repayment of $2,223 and the total interest bill over the course of the loan would be $429,132.

So on the average new owner-occupied of $371,200 a little difference of 2% in interest rate costs $453 a month and a whopping $163,123 over the life of the loan. Can you think of better things you could use that money for instead of donating it to the bank?

And with research from Yellow Brick Road finding 82% of Australians haven’t asked their lender for a better home loan offer in the last two years and 40% have never refinanced, it’s not hard to see why the banks take borrowers for granted!

Cheers,

Daniel