You have an account with at least one of the Big Four banks – ANZ, CommBank, Westpac or NAB or another bank or credit union you have been with forever, out of habit, set and forget. You have cards and loans with as well. Maybe even a home loan. You already know the bank, it knows you, your TFN, 100 points of ID, income and debts. They still have a branch somewhere near you. You think. You might also feel more secure applying for a home loan with a bank that’s been around for a century or more. If you set and forget your banking, you are missing the opportunity to compare the best rates and deals. And the good banks and lenders make everything easy, online and quick. You may find better interest rates with smaller banks and lenders By stepping outside of your comfort zone, you could end up paying a lower interest rate on your mortgage which, over the years, can save you tens of thousands of dollars Which lenders have lower rates than the Big Four banks? In short, lots of lenders have lower rates than the Big Four. They have to offer attractive rates in order to draw in business. Many smaller lenders also have a more niche market that they operate well in, and most smaller lenders have smaller overheads, enabling them to pass their lower costs on to their customers. You’ve seen the Big Four’s offerings, so what can smaller lenders do for you? UBank can offer a one – year deal for 2.99 per cent, which means a monthly payment of $631. It can also offer this rate for three years, making this totally online lender well worth looking at. Reduce Home Loans has a two – year fixed deal for 2.79 per cent, which gives borrowers a monthly payment of $615. RAMS’ fixed rate home loan is a two – year deal at 2.99 per cent, which is very attractive. However, this mortgage comes with a $20 monthly fee. RAMS also offers a self–employed fixed rate loan for 4.39 per cent (plus a $20 monthly fee). Well Home Loans is a small provider that offers one of the lowest rates going – 2.74 per cent for three years, which results in a monthly payment of $611. CUA has a three–year deal at 2.98 per cent. This deal has no ongoing fees and will mean monthly repayments of $631. Many CUA products offer customers a redraw facility as well, which can be useful. Are small banks safe? Yes, they are. Even the smallest and most alternative lenders have to be licensed by the Australian government in order to legally offer loans and mortgages. In the event of your mortgage provider collapsing, all that would happen to you is that your outstanding balance would be bought by another (possibly bigger) lender. Your payments would carry on as normal, they’d just go to another institution. How much can I save by refinancing? You can save quite a bit by refinancing. If your current deal is coming to an end within the next few months, then you should spend some time on a comparison site, with a mortgage calculator, to compare and contrast offers. Let’s say you have 25 years left on your mortgage, you owe $180,000 on it, and your interest rate is 3.69 per cent. Your monthly repayments will be $919 and over the course of your mortgage you’ll pay $95,870 in interest. By refinancing to another product with a lower interest once your current deal ends, you could save thousands. If you take your home loan to a provider which offers you a rate of 2.74 per cent, your monthly payments will be $829 and your total amount of interest will be $68,831. This is a saving of almost $30,000 over the years. You can compare home loan deals from Australian banks, non-bank lenders and credit unions at InfoChoice. The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.