How Much Is Your Home Loan Actually Costing You? A 5-Minute Self-Audit (May 2026)

If you took out your home loan more than two years ago and haven't reviewed it since, there's a good chance your bank is quietly charging you thousands more than you need to be paying.

This isn't a sales pitch. It's a five-minute self-audit you can run yourself, today, with nothing more than your latest mortgage statement and a calculator. By the end, you'll know whether your loan is still competitive — or whether you're being taken for a ride.

Why this matters right now

The Reserve Bank lifted the cash rate to 4.35% on 5 May 2026, and the big four banks have all passed on the full 0.25% increase to their variable-rate customers. The average variable rate in Australia is now sitting around 6.84%, but the sharpest deals we're placing clients into this month are in the low 6% range for well-qualified borrowers.

That gap — between what you're paying and what you could be paying — is where the money is. On a $600,000 loan, the difference between 6.84% and 6.19% works out to roughly $255 a month, or around $3,060 a year. Over a 25-year loan term, you're looking at tens of thousands of dollars.

So let's find out where you actually stand.

The 5-minute self-audit

Grab your most recent home loan statement before you start. You'll need it for every step.

Step 1 · Find your current interest rate

It's on your statement, usually near the top. Write it down to two decimal places (e.g. 6.74%, not "around 6.7%"). If you have a split loan with both fixed and variable portions, write down both.

Step 2 · Compare it to today's market

Here's a rough benchmark as of May 2026, following the RBA's latest hike to 4.35%:

If your rate is sitting in the "average" or worse bracket, you're almost certainly overpaying. Banks reserve their sharpest pricing for new customers, not existing ones.

Step 3 · Calculate your "loyalty tax"

This is the most eye-opening number you'll generate today. Take the difference between your rate and a competitive rate (around 6.19% in today's market) and multiply it by your loan balance.

Step 4 · Check your loan features

Most borrowers don't know what features their loan actually has. Pull up your statement or log in to your banking app and check whether you have:

• An offset account (and if so, whether you're using it properly)
• A redraw facility
• The ability to make extra repayments without penalty
• A fixed-rate component and when it expires

If you have an offset account sitting empty, that's another easy win. Even $20,000 sitting in offset on a 6.5% loan saves you around $1,300 a year in interest — money that would otherwise be earning maybe 4% in a savings account.

Step 5 · Check when you last had a rate review

Banks don't volunteer to lower your rate. You have to ask, and even then they'll typically only shave 0.10% to 0.20% off unless they think you're seriously considering leaving.

If it's been more than 12 months since you last reviewed your rate — or worse, you've never reviewed it — that's a flashing red light.

What to do with what you've found

Run through those five steps and you'll fall into one of three groups:

A note on refinancing costs

People often hesitate to refinance because they think it's expensive or complicated. The reality in 2026 is that most lenders offer cashback incentives of $2,000 to $4,000 to switch, which usually covers all switching costs (discharge fee from your old lender, government fees, and any valuation costs). On a meaningful rate reduction, you're typically ahead within the first few months.

The real cost of refinancing isn't the fees — it's the time. Done well, it takes a few hours of your time spread over four to six weeks. Done poorly, it can take months and leave you in a worse loan than the one you started with. That's where a good broker earns their keep.

Common questions about reviewing your home loan

What is a home loan self-audit?

A home loan self-audit is a short five-step check you can run yourself to determine whether your existing Australian mortgage is still competitive. It involves finding your current interest rate, comparing it to today's market benchmarks, calculating how much extra you may be paying (the "loyalty tax"), reviewing your loan features such as offset and redraw, and noting when you last had a rate review. The full audit takes around five minutes with your most recent mortgage statement.

How often should I review my home loan?

At least once every 12 months, and after every RBA cash rate decision. Banks frequently change their pricing — sometimes within days of an RBA move — and existing customers rarely receive automatic discounts. A 30-minute annual review can be worth thousands.

What is a "loyalty tax" on a home loan?

The loyalty tax is the gap between what new customers are charged and what existing customers continue to pay. Australian banks routinely offer their sharpest pricing to attract new borrowers, while leaving long-standing customers on uncompetitive rates unless they actively negotiate. On a $500,000 loan, the loyalty tax often costs $3,000 to $5,000 a year.

Is it worth refinancing for a 0.50% rate reduction?

Usually yes. On a $500,000 loan, a 0.50% reduction saves around $2,500 a year in interest. With lender cashback offers commonly covering switching costs, you're typically ahead within months. For a 0.25% reduction, the math is closer — we'd model it specifically for your situation.

Will my bank lower my rate if I ask?

Sometimes. Most banks have a retention team with authority to discount your rate to keep your business. The reduction you can expect depends heavily on your loan-to-value ratio, repayment history, and whether you can credibly demonstrate you'd refinance elsewhere. Coming in with a specific competing rate makes a significant difference.

How long does refinancing a home loan take in Australia?

Typically 4 to 6 weeks from application to settlement, though it can be faster for clean files with cooperative lenders. The longest delay is usually the discharge process at your current lender, which can take 2 to 3 weeks regardless of how quickly the new lender approves your application.

Does refinancing affect my credit score?

A refinance creates one credit enquiry on your file, which has a minor short-term impact. Applying to multiple lenders directly creates multiple enquiries, which compounds the impact. Working through a broker means we pre-qualify your file with the most suitable lender before formally lodging, protecting your credit profile.

Should I switch to a fixed rate now that the RBA is hiking?

It depends on your view of where rates are heading and your appetite for stability versus flexibility. Fixed rates in 2026 are pricing in further hikes, so they're typically higher than variable rates today. Fixed loans also restrict extra repayments and offset use. We can model both scenarios for your specific situation.

What's an offset account and should I have one?

An offset account is a transaction account linked to your home loan where the balance reduces the interest charged on the loan. $20,000 in offset on a 6.5% loan saves around $1,300 a year. For most borrowers with surplus cash, offset is worth more than the typical $10 to $15 monthly fee.

Do you charge a fee to review my home loan?

No. Our service is paid by the lender at settlement if we end up refinancing you. The initial review is free, takes 15 minutes, and there's no obligation to switch lenders or use our service further. All commissions are disclosed in writing upfront.

The honest summary

If you haven't reviewed your home loan in the last 12 months, there's a strong chance you're paying more than you need to. The five-minute audit above tells you whether that's the case. The fix — whether it's a negotiated rate review or a full refinance — usually takes a few hours of your time and saves thousands a year.

Even if you don't switch lenders, the act of running this audit once a year is one of the highest-ROI things you can do with five minutes. The bank isn't going to do it for you.