Review your home loan rate at least once a year, and straight away after any big change such as an RBA decision, the end of a fixed term or a jump in your property’s value. Lenders often keep their sharpest rates for new customers, so borrowers who never ask can end up paying well above the market. The gap between the average and the lowest advertised variable rate was more than 0.8 percentage points in October 2026, worth over $300 a month on a $600,000 loan.
Why reviewing your loan pays
Lenders compete hardest for new borrowers. Existing customers’ rates often drift up over time compared with new-customer offers, a gap regulators have called the “loyalty tax”. Unless you ask, your lender has little reason to cut your rate.
| Rate gap on a $600,000 loan | Extra repayments a month | Extra repayments a year |
|---|---|---|
| 0.25% | About $100 | About $1,200 |
| 0.50% | About $200 | About $2,400 |
| 0.84% (average 6.63% vs lowest 5.79%) | About $327 | About $3,900 |
Our calculations for a 30-year principal and interest loan. Average and lowest owner-occupier variable rates from Canstar, as at 2 October 2026.
How often to reassess
| When | What to do |
|---|---|
| Every 12 months | Compare your rate with new-customer rates for your LVR and loan type |
| After every RBA decision | Check your lender passed on the change in full, and how its rates compare now |
| Two to three months before a fixed rate ends | Find out the revert rate and line up alternatives |
| When your property value rises or your loan balance falls | Ask for a revaluation; a lower LVR can unlock a cheaper pricing tier |
| When your income or debts change | A stronger position can support a better rate or a refinance |
| When you receive a better offer | Ask your lender to match it |
The RBA raised the cash rate four times in 2026, most recently to 4.60% on 29 September, and makes eight decisions a year. Each one is a good prompt to check your rate.
How to review your loan in four steps
- Find your current rate and balance. Check your latest statement or banking app, and note any fees and features you use.
- Compare the market. Look at rates for your loan size, LVR and repayment type, and check the comparison rate. Our guide on how to compare home loans covers what to look for.
- Ask your lender for a better rate. Tell them what competitors are offering. Many lenders have retention discounts for customers who ask. See how to negotiate.
- Refinance if they won’t move. Weigh the saving against switching costs such as discharge, application and valuation fees, and break costs on a fixed loan. See refinance rates.
What to check during a review
- Your LVR. Rising values or a falling balance can move you below 80% or 70%, where many lenders price more sharply. See how to use your equity and LVR to get a better rate.
- Fees. Are you paying for a package or features you don’t use?
- Features. Would an offset account save you more than a slightly lower rate?
- Loan type. Does fixed, variable or a split still suit your plans?
- Incentives. Cashbacks can help cover switching costs, but compare the rate first. See home loan cashback offers.
When to act quickly
- Your fixed term is about to end and the revert rate is well above the market.
- Your lender didn’t pass on a rate cut in full, or raised rates by more than the RBA.
- You’re paying well over the average rate for your loan type.
- You’re planning to renovate, buy or invest and need a lender whose policy suits your next step.
Frequently asked questions
How often should I compare my home loan rate?
At least once a year, and whenever something changes: an RBA decision, the end of a fixed term, a rise in your property’s value or a change in your finances. Comparing takes less than an hour and a single phone call to your lender can be worth hundreds of dollars a year.
Do lenders charge existing customers more?
Often, yes. Lenders tend to offer their sharpest rates to new customers, while existing customers’ rates can be higher unless they ask for a review. Asking your lender to match a competitor’s new-customer rate, or refinancing, can close the gap.
What is a loyalty tax on home loans?
It’s the extra interest long-standing customers pay compared with new borrowers on the same type of loan. It builds up quietly when lenders don’t pass on discounts to existing customers. On a $600,000 loan, even a 0.5% gap costs about $200 a month.
Sources
- Canstar, Average home loan interest rates, as at 2 October 2026
- Reserve Bank of Australia, Monetary Policy Decision, 29 September 2026
- ASIC Moneysmart, Switching home loans
General information only. It does not consider your objectives, financial situation or needs and is not credit, tax or financial advice.