If you’ve ever found yourself staring at your online banking app, crunching the numbers on that mortgage, you’re not alone. Households all over Brisbane—and the rest of Australia—are wondering if sticking with their current lender is really the smartest move when the fixed term rolls off or rates suddenly spike. Here’s the thing: Australians remortgage for all sorts of reasons—grabbing a sharper rate, consolidating their home loan, or chasing features that actually fit their lives. But does loyalty pay off? Or are you leaving money on the table by not looking further afield?
The Comfort and Catch of Remortgaging with Your Existing Lender
Choosing to remortgage with your current lender feels safe, right? There’s no need to dig out piles of paperwork. They already have your history, your statements, and probably half your life story at this point. Many people love this no-fuss path: you just ask, negotiate, maybe sign one or two things, and you’re good to go. Sometimes lenders even offer you a "product switch," which is basically a new rate or loan that keeps you on their books with fresh terms. Remortgaging can be smooth as a flat white on Sunday morning.
But let’s get real: banks and lenders know that humans are creatures of habit. They bank on a certain percentage of us just rolling over into whatever deal comes next, especially if life is busy. According to a 2023 survey by Canstar, more than 70% of Aussie homeowners renewed with their existing bank simply because it was easier than shopping around. But there’s a flip side—loyalty tax. Lenders often reserve their best offers for new customers as bait, while existing clients get “standard” rates. Sounds unfair, right? It happens quietly: one study by the ACCC found average home loan holders could save over $850 a year just by switching, even with their current lender.
Here’s another angle: negotiation. Banks aren’t going to offer you a discount unless you ask. If you’re happy to call, sit through some awkward small talk and mention competitor offers, you might wangle a decent deal. But some people don’t know their negotiation power. Your loyalty makes you low-risk, so use that to push for rate match or better offset options. Still, if you don’t compare with what’s actually out there, it’s hard to know if you’re being shortchanged. So while staying feels easy, it pays to treat the process as a fresh application—don’t just roll over and accept whatever your lender puts on the table.
Hidden Costs, Unexpected Perks, and When to Consider Switching
If you’re thinking, “What’s the harm in an easy life?”, let’s talk money and peace of mind. First, check the fees. While some lenders will switch you for free, others have sneaky charges—think discharge fees, variation fees, or new application fees even with the same company. On the other hand, moving to a new lender can trigger legal charges, valuation costs, and even mortgage registration fees. According to Finder’s 2024 Home Loan Report, switching lenders can set you back anywhere from $800 to $2000 once you factor everything in. Existing lenders may waive these, so ask.
Here’s what often makes people stick: faster processing and zero paperwork. If your financial situation hasn’t changed (no career jumps, no new debts) and your home hasn’t been drastically renovated, your lender may fast-track the process. Some even let you switch products on their app, have your e-signature, and boom—you’re done in days, not weeks.
But don’t let speed cloud your judgment. If you’re rolling off a low fixed-rate deal to a variable rate that suddenly leaps by 1.5 percent, that “quick fix” could cost you thousands in the long run. For example, on a $500,000 loan, a 1.5% bump over 25 years adds a whopping $100,000+ in extra repayments. Grab a calculator or hop onto a comparison website. Look at what other lenders offer. Remember, many will chip in with bonuses, cashback, or cover some refinance fees if you move. These extras vary month by month—or disappear after a marketing campaign—so it pays to act fast if you see a killer offer.
Let’s talk features. Sometimes a new lender offers better redraw or offset facilities, faster digital service, or tools that make life easier. If your goal is flexible repayments or multiple offset accounts for different savings goals, your current bank might be lagging behind. Then again, if you’re all about stability, and just want a no-nonsense loan, your existing lender might have more basic options—and less room for hidden fees.
Here’s where it gets tricky—if your equity has dropped (say, the market in your suburb dipped), your bank might revalue your house, bump up your interest if your Loan to Value Ratio changes, or even knock back your application. New lenders will do the same, but with stricter criteria. Don’t get caught off-guard. Always check your latest property valuation and loan balance before starting any mortgage chat.
Let’s look at a quick comparison of what you might be weighing up:
| Factor | Remortgage with Existing Lender | Switch to New Lender |
|---|---|---|
| Paperwork & Approval | Minimal—your info’s on file | More—full application process |
| Fees | Usually lower or waived | Discharge, valuation, application fees may apply |
| Speed | Usually quicker—days, not weeks | Varies; can be delayed by checks, settlement |
| Potential Savings | May miss out on new customer deals | Often bigger discounts, cashback offers |
| Flexibility & Features | Usually limited to existing product line | Wider market choice |
How to Maximise Value Whether You Stay or Switch
If you’re serious about saving money, don’t just accept the first deal your lender emails you. Here’s what smart homeowners are actually doing to squeeze the most value out of their remortgage:
- Remortgage at the end of a fixed-rate period. This is when most rates “revert” upwards—act before you end up on the standard variable and your costs jump.
- Don’t underestimate the power of a side-by-side comparison. Sites like RateCity or Canstar crunch current rates across major lenders in seconds. Get a real view of what you could save.
- Call your lender first—but don’t reveal your cards. Ask them to tell you today’s best possible offer for your profile. Then push for a match with competitors’ rates (and mention any hot offers you’ve seen).
- Watch for “honeymoon” rates or introductory discounts. These sound great but check what the rate reverts to after 1-2 years. Sometimes a no-frills, consistently low rate wins the savings race in the long run.
- Look beyond interest rates—extra repayments, offset accounts, redraw flexibility, and digital tools often matter more than a fractional rate cut if you plan to pay extra or want flexibility.
- If you go with a new lender, factor in the moving costs and the hassle. Know the impact on your credit report: too many applications at once can hurt your score.
One more hard fact for Aussies with a mortgage: 2024’s average new home loan rate sits at 6.2%, while many loyal existing customers are paying up to 7% because they never picked up the phone. On a $600k home loan, that’s about $400/month just for sticking with the status quo. Ouch.
The smartest play? Don’t get attached to the idea of loyalty. Treat your existing lender like any other business. Negotiate hard, get everything in writing, and know exactly what you’re signing. So, is it better to remortgage with your existing lender? Sometimes it is, if they’re willing to actually work for your business. But if they’re not, be ready to walk—you might surprise yourself with what’s possible when you actually shop around.
