Australians are being urged to look beyond the big four banks for home loans as new data reveals huge savings from smaller lenders.

Analysis of almost 500 home loan products published on Thursday by comparison site Mozo found major bank rates remain much higher than competitors, with customer-owned banks coming out ahead for value.

Mozo’s Rachel Wastell said that despite having more than 70 per cent of mortgages, the big four banks charge 0.5 percentage points more in interest on average than the wider market.

They’re advertising rates 1.5 per cent higher than the best-value loans, according to Mozo.

“There’s a huge opportunity for borrowers to look beyond the big four,” Wastell explained.

“It is important home owners realise they’re a valuable commodity to the banks, and that their average rates are much higher than our winners.”

The Mozo report finds Australians could save thousands switching to a cheaper lender, with consumer-owned banks coming out on top in the latest analysis, followed by online banks.

For example, the big banks have an average advertised variable home loan rate of 7.48 per cent, which is significantly higher than the 6.82 per cent average variable rate market wide.

And those lenders that won Mozo’s 2024 award were offering rates as low as 6.1 per cent, which on a typical $500,000, 25-year home loan is $436 a month in repayment savings.

Wastell said many home owners are paying thousands more on their loan repayments since the RBA began hiking interest rates steeply.

But, despite that, survey data suggests almost half (42 per cent) of people aren’t even aware what their current interest rate is.

A further 20 per cent said they had not compared their loan to others since buying a home.

That’s a problem because unless you know the details of your current deal you won’t be in a position to renegotiate a better one with a cheaper lender, or even ask your lender for a better deal.

Wastell said Australians with the big banks should ring them and ask why their rate might be higher than what’s available elsewhere, as it could get you a better deal without moving.

“Say you looked and can see X number of banks are offering an X per cent lower rate – what can you do to give me that same opportunity to save?” Wastell said.

Mozo is also urging people to talk to their financial advisers or mortgage brokers about whether an offset account might be worth it for them.

Mortgages with offsets typically carry a slightly higher interest rate than those without, but they can save you big time on interest payments if you are able to park your income and any additional savings in them.

Wastell said it’s a myth that you need thousands in the bank in order to benefit from an offset, with even small amounts going a very long way.

Mozo estimates the average home owner using an offset as an everyday savings account could save more than $284 per month.

“A home loan is decades of debt, and interest on home loans is calculated daily, so even the smallest difference in rates can save you hundreds of dollars a month,” Wastell said.

“Borrowers should also check the less obvious but very impactful changes they can make, like increasing how often they pay, which could save them over $100,000 in interest.”