Aussie mortgage-holders are paying more than they need to

Loans.com.au founder Kim Cannon said data from comparison site Canstar showed that a homebuyer who borrowed $450,000 could pay more than $114,000 in extra interest over the life of the loan if they made the wrong choice.

He said homebuyers who assumed that all lenders offered broadly similar value were making a big mistake.

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“If buying a home is the biggest financial decision you will ever make, choosing a home loan is the second biggest,” he said

“The wrong decision on an average-sized loan can cost more than $100,000 dollars over the term of the home loan. These are life-changing sums.

"When shopping for a home loan, buyers should avoid distractions and keep their eye firmly on the comparison rate, which combines all costs into a single percentage rate.

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“Just as buying property is all about location, location, location, when you take out a loan it is all about comparison rate, comparison rate, comparison rate.”

Loans.com.au recently cut the variable rate for home purchases on its Essentials product to a record-low 3.39 per cent (comparison rate 3.41 per cent).