If you haven’t reviewed your home loan in the last 12–24 months, there’s a good chance you’re paying more than you should — and you may not even realise it.
Since interest rates began rising sharply in 2022, many Australians have seen their fixed-rate loans expire, only to be rolled onto standard variable rates (SVRs) that are far less competitive.
This hidden cost is what the industry calls the “loyalty tax.”
🧾 What Is the Loyalty Tax?
Banks are notorious for offering better deals to new customers than to their existing ones. Why? Because they know most borrowers:
Won’t bother switching
Won’t even check their interest rate
This discrepancy — where loyal customers pay more than newcomers — is the loyalty tax. And it can cost you thousands each year in extra interest.
For example:
One borrower may be paying 6.9% with a major bank, while new customers are being offered 6.1%.
On a $600,000 loan, that’s a difference of over $3,000 annually.
🔁 Reverting to the ‘Default’ Rate
When fixed-rate loans expire, lenders typically roll borrowers onto their standard variable rate — usually one of the highest they offer.
Unless you proactively renegotiate or refinance, you’ll stay on that rate indefinitely.
Many borrowers assume their bank will offer a better deal or automatically lower the rate to stay competitive. Sadly, that’s rarely the case.
🛠️ What Can a Mortgage Broker Do?
This is where a mortgage broker can add serious value. They can:
✅ Review your current loan and rate against the market
✅ Negotiate with your existing lender for a better deal
✅ Compare dozens of lenders to find cheaper or more flexible options
✅ Handle the paperwork if you decide to refinance
Often, just the threat of refinancing is enough to get your current lender to sharpen your rate.
And the best part? Most brokers are paid by the lender, not the borrower — meaning their service is usually free for you.
💡 You Don’t Need to Switch to Save
Even if you don’t want to change banks, your broker can still help you:
Lower your interest rate
Waive annual fees
Restructure your loan (e.g. fixed, split, or interest-only)
Access offset accounts for greater flexibility
Sometimes, all it takes is asking the right question —
or having the right person ask it on your behalf.
🧠 Final Thought
In today’s high-rate environment, doing nothing may be the most expensive decision you make.
Whether you’re an owner-occupier or an investor, reviewing your mortgage regularly — with the help of a broker — could save you thousands.
Don’t pay the loyalty tax.
Get a second opinion and make sure your mortgage is working as hard as you are.