New Financial Year & New Reasons for a Home Loan Health Check

A new financial year is a natural line in the sand, and it's worth spending fifteen minutes on your mortgage before the last one fades from memory. With three rate hikes already this year and a wide variation in rates between lenders, plenty of borrowers are quietly paying more than they need to. A simple check can tell you within minutes whether that's you.

Since 2017, Osinski Finance has helped Rockingham and Perth homeowners compare mortgages across nearly 100 lenders to find better loan options.  Below is the same five-point check we run with clients, so you can start it yourself before deciding whether it's worth a call.

Quick Answer: What Is a Home Loan Health Check?

The review looks at your interest rate, loan features, fees, flexibility, and whether you're still getting a competitive deal. It takes a broker only a few minutes to run through, and if any of the five areas have drifted out of line with the current market, refinancing or renegotiating could put real money back in your pocket. It costs nothing to check, and for most homeowners, a health check is worth doing at least once a year, ideally at the start of a new financial year while the last twelve months of statements are still fresh.

Use the five points below as a simple checklist before deciding if it's time to speak with a mortgage broker about refinancing. 

Why July Is the Right Time to Review Your Home Loan

The new financial year is a useful trigger because it's when most other bills, budgets and financial habits get a reset anyway. Making it part of your annual routine helps ensure it doesn't get forgotten. If you've already made a habit of an EOFY financial tidy-up, your mortgage deserves a spot on that same list, particularly after a year that has included multiple cash rate movements.

The hard part usually isn't deciding to check; it's knowing what to check. Here are the five things worth weighing up.

The 5-Point Home Loan Health Check

1. Review Your Loan Rate

Not sure what rate you're actually paying? You're not alone. Over one in two home loan borrowers are in the dark about their own mortgage rate, and not knowing this number can be an expensive oversight.

Grab your latest loan statement or open your banking app. Your current rate is usually listed under your account details. As a guide, the average variable rate in Australia is currently about 6.45%, yet some lenders are still offering rates that start with a "5" or a low "6". If your number doesn't stack up well against those benchmarks, that's the clearest signal that it's time to review your home loan.

2. Confirm Your Loan Features Still Earn Their Keep

Loans can come loaded with features designed to help you save on interest or pay down your mortgage sooner, offset accounts and redraw facilities being the two most common. The catch is that access to these features can mean paying a slightly higher interest rate than a no-frills loan would charge.

If you're using every feature on your loan, that premium is probably worth it. If you're not, a basic loan at a lower rate could leave you better off. It's a similar principle to the one behind the recent rise in offset account use, where the feature only pays for itself if it's actually being used.

3. Add Up the Fees You're Paying

It's natural to focus on your interest rate and overlook fees, but they add up over time. Around 14% of loans still charge monthly fees, and where they apply, these can run to as much as $15 a month. That's a small number on its own, but it compounds over the life of a 25- or 30-year loan into a meaningful sum.

If you're being charged a monthly fee and can't point to a clear benefit you're getting in return, that's an easy cost to remove simply by switching to a fee-free loan structure.

4. Test Your Loan's Flexibility

Flexibility is about how well your mortgage bends around changes in your life, not just how it performs on paper. Can you make extra repayments without a cap? Do you have fee-free redraw if you need to pull funds back out for an unexpected bill? Is your loan split between a variable portion, to benefit from any future rate falls, and a fixed portion, for repayment certainty? These are the same trade-offs we've walked clients through when comparing a fixed rate against a variable home loan rate.

Portability matters too. A portable loan lets you carry your existing mortgage across to a new property if you move, rather than paying the setup costs of an entirely new loan. If your current loan can't do any of this, it may not be flexible enough for where your life is heading next.

5. Check Whether Your Lender Still Deserves Your Loyalty

Good service is about more than a friendly call to check in; it's about whether your lender is actually rewarding you for staying. Often, it isn't. According to Canstar, an owner occupier who took out a loan five years ago and hasn't renegotiated since is likely paying a rate of 6.98%, even though many lenders are currently offering variable rates below or around 6.0%.

Despite that gap, more than half of Australian home loan borrowers, 52%, have never changed lenders. We've written before about how staying loyal to one lender for too long can work against you, and this is exactly the pattern that keeps costing borrowers money. If any of that sounds familiar, it's worth finding out whether you're paying a loyalty tax simply for sticking with the same bank.

Don't Forget Your Equity Position

One area worth adding to your check, especially if you haven't looked at your loan in a couple of years, is how your equity has moved. If your property's value has risen or your loan balance has fallen, your loan to value ratio, or LVR, may now sit in a lower bracket than when you first borrowed. A lower LVR can unlock access to sharper interest rates and lower or waived lender's mortgage insurance, so it's worth checking where you currently sit before assuming your options haven't changed. This is particularly relevant if you're weighing up refinancing your home loan or considering using existing equity toward an investment property.

Head Into the New Financial Year Confident About Your Home Loan

A home loan health check shouldn't take much time out of your schedule, but skipping it can be an expensive habit. Rate, features, fees, flexibility, lender loyalty and equity are the six areas worth a look, and most of them can be checked from your banking app in the time it takes to make a cup of tea.

If anything above raised a question mark over your current loan, that's the moment to bring in a broker rather than guess. Contact us today about a home loan health check, and let's make sure this new financial year starts with a mortgage that's actually working for you.

Key Takeaways

• A home loan health check covers five core areas: interest rate, features, fees, flexibility and lender loyalty, plus equity as a sixth if it's been a while since your last review.
• The average variable home loan rate in Australia currently sits around 6.45%, though rates starting with a "5" or low "6" are still available from some lenders.
• Roughly 14% of home loans still carry monthly fees, which can add up to hundreds of dollars over the life of a loan.
• Borrowers who haven't renegotiated in five years risk paying a "loyalty tax", with rates as high as 6.98% compared to current offers below 6.0%.
• Despite this gap, 52% of Australian borrowers have never switched lenders, often simply because they haven't checked.
• A quick conversation with a broker can confirm within minutes whether it's worth pursuing refinancing your home loan.

Ready for Your Own Home Loan Check?

Osinski Finance helps Rockingham and Perth homeowners find better home loans. With access to nearly 100 lenders, Nathan, Amy and the team compare options that suit your goals, whether you're buying, refinancing, investing, or purchasing your first home.

If you're wondering whether your current loan is still the right fit, contact us for a personalised home loan review.

Frequently Asked Questions

What is a home loan health check? 

A home loan health check is a short review of your existing mortgage to confirm it's still competitive. It covers your interest rate, loan features, fees, flexibility, and how well your lender is rewarding your loyalty. A broker can usually run through all five areas with you in fifteen minutes or less, and the outcome tells you whether refinancing or renegotiating is worth pursuing.

How often should I review my home loan? 

Once a year is a sensible minimum, and tying it to the new financial year makes it easy to remember. If your fixed rate period is ending, your property value has changed significantly, or the Reserve Bank has moved the cash rate more than once since your last check, it's worth reviewing sooner rather than waiting for the anniversary to come around.

What is the average home loan interest rate in Australia right now? 

The average variable rate currently sits at around 6.45%, though this moves with the cash rate and varies by lender. Some lenders are offering rates starting with a "5" or a low "6", so it's worth comparing your own rate against current market offers rather than assuming the average applies to you.

Will refinancing hurt my credit score? 

Refinancing involves a credit check, which can cause a small, temporary dip in your credit score. For most borrowers, this impact is minor and short-lived, and it's generally outweighed by the savings gained from a lower rate or better loan structure over the following years. A broker can help you time your application to minimise unnecessary credit enquiries.

What loan features are actually worth paying extra for? 

Offset accounts and redraw facilities are the two features most homeowners genuinely use and benefit from, since both can reduce the interest charged over the life of the loan. Features like a linked credit card or chequebook access are used far less often, and if you're not using them, they may not justify the extra cost of a package loan.

How much do home loan fees really add up to over time? 

A monthly account-keeping fee of $15 might sound small, but over a 25- to 30-year loan term, it adds up to several thousand dollars. Around 14% of Australian home loans still carry this kind of fee, and switching to a fee-free loan structure is one of the simplest ways to reduce it.

What is a home loan "loyalty tax"? 

A loyalty tax refers to the gap between the rate a lender offers new customers and the higher rate long-standing customers are often left paying if they never renegotiate. Data suggest borrowers who haven't renegotiated in five years may be paying around 6.98%, compared with rates below 6.0% currently available elsewhere.

Is it worth switching lenders for a lower rate? 

It depends on the size of the gap between your current rate and what's available, plus any switching costs such as discharge or establishment fees. For most borrowers with a meaningful rate gap, the long-term savings outweigh the upfront cost of refinancing within a couple of years, but a broker can run the actual numbers for your specific loan before you decide.

How does my equity affect my refinancing options? 

If your property has grown in value or you've paid down a good portion of your loan, your loan-to-value ratio will have improved, which can open the door to sharper rates and reduced lender's mortgage insurance costs. This is worth checking even if you're not planning to refinance immediately, since it affects what future borrowing, including for an investment property, might look like.

Does Osinski Finance charge for a home loan health check? 

No. A home build check with Osinski Finance costs nothing, and there's no obligation to proceed with any changes afterwards. If we can secure you a better deal, the lender pays us a commission, and if we can't improve your position, you've lost nothing but a short conversation.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal, nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.