The start of a new financial year is often associated with tax returns, budgeting and setting new financial goals. But there is one important financial commitment many Australians overlook: Their home loan.
For many borrowers, July is an ideal time to review your home loan and make sure it still supports your financial goals. Over the past 12 months, your income, expenses, property value or future plans may have changed. At the same time, lenders regularly update their products, pricing and policies, meaning your current loan may no longer be the most suitable option.
A simple annual review doesn’t always mean refinancing. Sometimes, it simply confirms you are already on the right loan. Other times, it can uncover opportunities to reduce costs, improve flexibility or better position yourself for future plans.
Guide Index
Why July Makes Sense
July marks the beginning of Australia’s new financial year, making it a natural time to take stock of your finances. Many Australians use this period to:
Your mortgage is likely your largest financial commitment, so it deserves the same level of attention. Rather than letting another year pass without checking your loan, July provides a convenient reminder to ensure it is still working for you.
Are You Paying the Home Loan Loyalty Tax?
One of the biggest reasons borrowers review their mortgage each year is to check whether they’re paying what’s commonly known as the “loyalty tax.”
What is the loyalty tax? Many lenders regularly advertise lower interest rates to attract new customers, while long-term customers may remain on older, less competitive rates unless they negotiate.
If you haven’t reviewed your loan in several years, you could be paying more than necessary without realising it.
A quick comparison of your current interest rate against today’s market may reveal opportunities to reduce your repayments or lower the total interest paid over the life of your loan.
If your current lender isn’t willing to offer a more competitive rate, it may be worth exploring refinancing your home loan to see what alternatives are available.
Have Your Financial Goals Changed?
Your home loan should support your current lifestyle, not the version of your life from several years ago. Ask yourself:
Have you received a salary increase?
Have your household expenses changed?
Are you planning to renovate your home?
Thinking about buying an investment property?
Has your family grown recently?
Hoping to pay off your mortgage sooner?
As your circumstances evolve, the loan that once suited you may no longer be the best fit. Reviewing your mortgage annually helps ensure it continues to align with both your short-term needs and your long-term financial objectives.
Does Your Loan Still Have the Features You Need?
Interest rates are important, but they are only one part of the picture. It is also worth reviewing whether you’re paying for features you actually use. Depending on your circumstances, you may benefit from features such as:
-
An offset account -
A redraw facility -
Flexible repayment options -
The ability to make unlimited extra repayments -
Loan portability if you plan to move home
On the other hand, if you are paying package fees for features you rarely use, a simpler loan could potentially reduce your ongoing costs.
Has Your Property Value Changed?
Property values may have changed significantly since you first purchased your home. If your property’s value has increased, or you have steadily reduced your loan balance, your Loan-to-Value Ratio (LVR) may have improved.
A lower LVR can sometimes provide access to:
Lower Rates
Access to more competitive interest rate tiers offered by lenders.
Better Options
Access to significantly better refinancing opportunities across the market.
Reduced Costs
Lower overall ongoing lending costs and account management fees.
LMI Removal
The potential removal of Lenders Mortgage Insurance requirements.
This is another reason why an annual review can be worthwhile, even if you aren’t actively planning to refinance.
Is Your Fixed Rate About to End?
Many borrowers don’t realise their fixed-rate loan will automatically move onto their lender’s standard variable rate once the fixed period expires.
In some cases, this new rate may be significantly higher than the most competitive products currently available.
If your fixed-rate period is ending in the coming months, July provides an excellent opportunity to review your options before your repayments increase.
Starting the conversation early gives you time to compare lenders, negotiate with your current bank or consider home loan refinancing if it better suits your needs.
Could Refinancing Still Be Worth Considering?
Refinancing isn’t only about chasing the lowest interest rate.
It can also help borrowers:
- Reduce monthly repayments.
- Consolidate higher-interest debts.
- Access improved loan features.
- Better align their mortgage with changing financial goals.
- Potentially access using your home equity for future opportunities, if appropriate.
However, refinancing isn’t suitable for everyone. Before making a decision, it’s important to weigh potential savings against any discharge fees, application costs, valuation fees or break costs that may apply.
A Simple July Home Loan Review Checklist
If you are unsure where to start, consider working through these core questions:
What interest rate am I currently paying?
Have I compared it with today’s market?
Am I paying unnecessary ongoing fees?
Do I still use all my loan features?
Has my property’s value increased?
Is my fixed-rate period ending soon?
Have my financial goals changed over the past year?
Would speaking with a mortgage broker help me?
Even if the answer is that your current loan remains competitive, you will have greater confidence knowing you’ve reviewed it rather than simply assuming it is still the best fit.
Small Reviews Can Lead to Big Savings
Many Australians review their insurance, superannuation and household budgets every financial year. Your mortgage deserves the exact same attention.
A home loan review doesn’t necessarily mean changing lenders or refinancing immediately. Sometimes, it simply confirms you are already on a competitive product. Other times, it may identify opportunities to reduce costs, improve flexibility or better support your future plans.
The important thing is making the review part of your annual financial routine.
Final Thoughts
July offers more than just the start of a new financial year. It is an opportunity to pause, reflect and make sure one of your biggest financial commitments still aligns with where you are headed.
Whether you are aiming to reduce repayments, prepare for your next property purchase or simply ensure you are not paying more than necessary, taking the time to review your home loan each July can be a worthwhile habit.
A conversation with an experienced mortgage broker can help you understand your current position, compare your options and decide whether any changes are likely to benefit your circumstances.
Frequently Asked Questions