Are you finding it harder and harder to make ends meet, just managing to survive from pay to pay?  Refinancing your home loan is one of the fastest ways to ensure you are living more and saving yourself thousands of dollars a year by moving to a lender that offers a lower cost solution. One of the most surprising things, however, is just how many Aussies aren’t taking advantage of this massive savings opportunity. It is not difficult for a simple refinance to reduce your repayment costs by $100 to $300 per week – imagine what you could do with that? Take a holiday, upgrade your car or get a second one, or pay off your home loan.  With over 40 different banks and lenders in Australia vying for business, why are Australians hesitant to refinance their home loans? The following three myths may be holding you back.

The Bigger Banks Have Been Here Longer

One of the reasons people are hesitant to move their mortgage from one of the big four banks to a smaller one hinges on the reputation and longevity of those institutions. The reality is that many smaller lenders have been around longer than some of the big four. Take Bendigo Bank, for example, which has roots that go back as far as 1858 and offer good home loan solutions. Compare this with the Commonwealth Bank – who currently enjoy over 50% of the home loan market – who started their operations in 1912. The big four have larger marketing budgets; however, this does not mean they have been around longer than some of the other smaller lenders.

Smaller Lenders are Riskier

Another reason people are hesitant to change lenders and improve their financial standing comes down to the perceived risk of a smaller lender. Australia has one of the most regulated financial markets in the world. The sheer volume of requirements that lenders need to meet in order to operate in the finance industry means the risk of going with a smaller lender is next to non-existent. All financial institutions in Australia are subject to the same strict conditions, and are set up this way to ensure the Australian population has multiple choices, can choose within a highly competitive industry and is protected long before issues arise that can put their finances at risk.

It’s Too Much Effort

For some people, the thought of changing banks fills them with dread. The amount of information you need to provide and the time required can feel staggering, not to mention the leg work needed just to find a bank that is offering you a reduction on your current interest rate. The truth is, there are many finance brokers available who can do the running around for you and sort out the application process to make the change as easy as possible. There is a common misconception that mortgage brokers will only get you the home loan deal that gives them the highest commission. However, financial services legislation that has been introduced following the GFC means that mortgage brokers must provide you with complete and open commission rate transparency before you agree to any mortgage offer.


With the big banks increasing their rates for investors, making the change on your current mortgage will provide you with some much-needed financial breathing space. Your hesitation to change lenders is likely to be costing you hundreds of dollars a month – do yourself a financial favour by picking up the phone and giving a good finance broker a call.