Are you paying a loyalty tax to your bank?

By February 21, 2020 Tips No Comments

In a recent article by Charbel Kadib in Mortgage Business titled “Investors bear brunt of Loyalty Tax”

According to the Reserve Bank of Australia’s (RBA) latest Lenders Interest Rates data, existing variable rate home loan customers were charged an interest rate over 30 bps higher than new customers over the month of December. Drawing on the research, RBA governor Phillip Lowe encouraged long term mortgage-holders to review their interest rate and refinance to a better deal to capitalise on the competitive dynamic in the market. [1]

Looking at the differences found with advertised rates and differences between the rates paid by existing customers and those paid by new customers, the team at Smartmove find by reviewing the client’s rates on a regular basis we ensure they are in a competitive position. A recent review has seen one of our clients who has a loan at a major bank save over $18,000 per year in interest by working with our team.

The process of reviewing our existing client’s loans with their current bank, has saved our clients over $1,000,000 in annual interest savings in 2019. We have been reviewing our client’s rates on a regular basis since 2014 and are all part of the service we provide. In 2019 we saved our clients an average of $1,801 in annual interest on their home loans through our review process.

Although calling the bank to ask to match the new rate might seem like an ideal option, they aren’t always obligated to rate-match to provide a more affordable mortgage. This is where our expertise comes in and we can help you. We negotiate with the existing lender to get a better rate, and if not, we have access to a panel of over 35 lenders who are hungry to win your business and can often provide a reduced rate.

Do you think you are paying a “Loyalty Tax”, if so, please reach out?


  1. Kadib, Charbel (11 February 2020). “Investors bear brunt of ‘loyalty tax’”. Mortgage Business. Retrieved 12 February 2020.
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