It has come to our attention now more than ever before, that banks are blindly ripping off their customers…

I know you’re thinking “Come on, what’s new!?” Well there is that. But we have completed our own research into an often-overlooked area and the results are pretty shocking.

We reviewed a sample of home loans that settled between December 2019 and January 2020. All of these loans were with a bank that has a very good public image…

Shockingly, and within just over one year, their loans were costing them on average $3,489 per annum more, than if they had the banks current advertised rate.  

The disparity between these rates happened in as short as 15 months without any of these customers noticing. So I am going to outline how this happens, and how you can protect yourself from this phenomena.

How does this happen?

Banks are always going to offer their new customers their best possible rate to win their business. Then once they are in the door, they continue to offer their best possible rate to their new customers only. They leave their existing customers on old pricing and products meaning that over time, banks will slowly gain margin in their favour on those loans they wrote in the past. The longer a customer stays with them without reviewing their home loan, the more profit they make.

We’re not saying you need to refinance your home loan every 12 months. That is a time consuming an onerous task. We are saying that you need to review it at least that often. Your existing bank will quite easily reduce your interest rate for you, but you have to ask them. Sometimes fill in a form, call and wait on hold for 45 minutes, take time out of your day to go into a branch, or call your broker and ask them to do it of which a lot wont because they wont get paid for it.

How does Rate Tracker help?

When you connect Rate Tracker to your home loan it will review your interest rate every 30 days. If it finds that your rate is no longer competitive, it will trigger a “Rate Breach”. This will then immediately notify you via text, and the My Mortgage Freedom customer care team. The customer care team will get in touch with your existing bank for you and renegotiate your interest rate to get it back down to an acceptable level. All without you doing anything other than spectating.

Sample loan:

Check out the figures below that we have put together from the research we completed on our existing customers.

Loan amount: $500,000
Current Rate: 3,20%
Purpose: Owner Occupied
New Interest Rate: 2.49%
1 Year Savings: $3,515
3 Year Savings: $10,351

We record all Rate breach savings. On average, each renegotiation saves our customers $3,489 per year.