Why is my interest rate so high? If your home loan rate is sitting over 6.20%, you’re not alone — but you’re probably  overpaying.

 

Plenty of borrowers are still sitting on rates set during the peak of the cycle. And although the cash rate has started to soften slightly, many lenders haven’t automatically passed on the best rates to existing customers. This is often referred to as the loyalty tax — when banks quietly give better deals to new customers, while long-term borrowers end up stuck with higher repayments.

Here’s why your rate might be higher than average — and what you can do about it.

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01. You started with a high LVR or paid Lenders Mortgage Insurance (LMI)

When you first took out your loan, you may have had a smaller deposit, which pushed your loan-to-value ratio (LVR) above 80%. This typically results in lenders charging a higher interest rate, on top of LMI.

The good news? If you’ve had your loan for a few years, your property value may have increased while your loan has decreased. That means your LVR is now likely lower — and you may qualify for a sharper rate with the same or a different lender.

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02. You’re on an interest-only or investment loan

These loan types often attract higher rates compared to principal & interest loans for owner-occupiers. Lenders consider them slightly riskier, and price them accordingly.

The good news? Some lenders are offering more competitive rates to strong borrowers with investment or interest-only loans. With the right strategy, you could restructure or refinance to lower your rate and keep your investment goals on track.

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03. You have a large offset or savings balance

This one’s frustrating: if your lender sees that you’ve got substantial funds in your offset account or savings, they might assume you won’t bother switching — and won’t offer you their sharpest deal.

The good news? Lenders who want your business will reward a strong financial position with more competitive rates. It’s about knowing where to look — and showing them what you’re worth.

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04. You haven’t reviewed your rate in a while

Life gets busy, and unless repayments jump significantly, most people don’t think to review their loan regularly. But a quick check-in could reveal you’re now eligible for a far better rate — especially if it’s been 18+ months since you last reviewed your loan.

The good news? We do the legwork for you. In just one call, we can tell you whether your rate is still competitive — and what better options are available.

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What could you save?

Even a small drop in your interest rate can make a big difference.

Loan Amount	Rate Drop	Monthly Saving	Annual Saving
$500,000	0.50%	~$150	~$1,800
$750,000	0.50%	~$225	~$2,700
$1,000,000	0.50%	~$300	~$3,600

Refinancing is on the rise — and for good reason

You’re not the only one thinking about it. Over $18.8 billion in home loans were refinanced last month alone — a sign that many Australians are taking action.

In fact, refinancing activity is up 32.7% year-on-year, and the average owner-occupier rate is still sitting around 6.24%. But many lenders are offering far better — if you know where to look, and how to qualify.

If you’re wondering whether it’s worth making a move, we can help you find out.

In a free 30-minute finance strategy session, we’ll:

• Confirm your current rate and lender offer

• Compare it against sharper deals on the market

• Show you exactly what refinancing could save you

• Break down the true cost of switching

• Calculate how long it would take to recoup those costs

• Help you decide whether to stay put or make a smarter move

If the numbers stack up, we’ll guide you through the process. If they don’t — you’ll walk away confident you’re already in the right place. Find out more about our Finance Strategy Session here.