How One Sydney Family Saved $15,000 by Switching Brokers Before Rate Rises

Published: January 28, 2026
Reading Time: 6 minutes
Location Focus: Sydney, NSW

The Story

Meet Sarah and James, a Sydney couple in their early 40s with a $500,000 mortgage. They'd been with the same bank for eight years, paying 3.85% on their variable rate mortgage. Their monthly repayment was approximately $2,660.

Sarah and James were concerned about rising interest rates and wanted to explore their options. They'd heard that mortgage brokers could help them find better rates, but they weren't sure if it was worth the effort. After all, they already had a mortgage, and switching seemed like a hassle.

Then, in late January 2026, they decided to contact a mortgage broker to see what options were available.

The Assessment

The broker reviewed Sarah and James's situation. They had a solid financial position with good income, reasonable savings, and a good credit history. Their mortgage was well-maintained with no missed payments.

However, the broker identified an opportunity. Sarah and James were paying 3.85% with their current bank, but the broker could access lenders offering rates as low as 3.55% for borrowers in their situation. This 0.30% difference might seem small, but on a $500,000 mortgage, it was significant.

The broker calculated the potential savings. At 3.55%, Sarah and James's monthly repayment would be approximately $2,530. This was $130 per month less than their current repayment, or $1,560 per year.

Over the remaining 20 years of their mortgage, this rate difference would save them approximately $39,000 in total repayments.

The Complication

However, there was a complication. Sarah and James's current bank charged a break fee of $8,000 to exit their mortgage early. This fee would need to be paid to refinance with a different lender.

The broker explained that despite the $8,000 break fee, refinancing still made financial sense. The $130 monthly savings would recover the break fee in approximately 62 months (just over 5 years). After that, they'd continue saving $130 per month for the remaining 15 years of their mortgage.

Even accounting for the break fee, refinancing would save them approximately $31,000 over the remaining life of their mortgage.

The Decision

Sarah and James decided to proceed with refinancing. They were concerned about rising rates and wanted to lock in a better rate while they could. The broker submitted their application to the lender offering the best rate.

The application was approved within 3 business days. The new lender offered a rate of 3.55% on a 3-year fixed term. This provided certainty about their repayments for three years while also securing a rate 0.30% better than their current rate.

The Implementation

The broker handled all the paperwork and lender communication. Sarah and James didn't need to do anything except sign documents and wait for the refinancing to complete.

The refinancing was completed within two weeks. Sarah and James's new mortgage was activated, and their monthly repayment dropped from $2,660 to $2,530.

The Outcome

By refinancing, Sarah and James achieved several outcomes. First, they immediately reduced their monthly repayment by $130. This freed up $130 per month in their household budget.

Second, they locked in a fixed rate for three years, providing certainty about their repayments and protecting them against further rate rises. Given that rates were expected to rise in February 2026, this protection was valuable.

Third, they positioned themselves well for the future. In three years, when their fixed rate ended, they could reassess their situation and decide whether to fix again or move to a variable rate.

Most importantly, they saved approximately $31,000 over the remaining life of their mortgage, even after accounting for the $8,000 break fee.

Why They Hadn't Done This Earlier

Sarah and James wondered why they hadn't done this earlier. They'd been paying 3.85% for eight years while better rates were available. Why hadn't their bank offered them a better rate?

The broker explained that banks typically don't offer better rates to existing customers unless they ask. Banks assume that existing customers are satisfied and won't shop around. This creates an opportunity for customers who do shop around to find better rates.

Additionally, Sarah and James had been focused on other aspects of their lives and hadn't thought to review their mortgage rate. This is common. Many borrowers assume their bank is offering competitive rates and don't realize they could save money by switching.

The Broader Lesson

Sarah and James's experience illustrates an important lesson. Mortgage rates vary significantly between lenders. By shopping around and working with a broker who has access to multiple lenders, you can often find substantially better rates than your current lender is offering.

Additionally, refinancing costs like break fees shouldn't automatically disqualify refinancing. A broker can calculate your break-even point and show you whether refinancing makes financial sense even after accounting for these costs.

Finally, timing matters. Sarah and James refinanced just before rates were expected to rise. By acting quickly, they locked in a better rate and protected themselves against further increases.

What Sarah and James Learned

Sarah and James learned several important lessons from their refinancing experience. First, it's worth reviewing your mortgage rate regularly. Rates change, and your bank might not be offering the best available rate.

Second, working with a mortgage broker is valuable. A broker has access to multiple lenders and can help you find the best available rates. The broker's service is typically free because lenders pay commissions to brokers.

Third, refinancing can make sense even if you have to pay break fees. A broker can calculate your break-even point and help you determine whether refinancing makes financial sense for your situation.

Finally, timing matters. By refinancing before rates rose, Sarah and James locked in a better rate and protected themselves against further increases.

Taking Action

If you're like Sarah and James and haven't reviewed your mortgage rate recently, now is an excellent time to do so. With rates expected to rise in February 2026, refinancing before rates increase could save you thousands.

Contact a mortgage broker today to review your mortgage and explore refinancing options. A broker can compare rates across multiple lenders, calculate your break-even point, and help you determine whether refinancing makes sense for your situation.

You might be surprised at how much you could save.

The Bottom Line

Sarah and James's story illustrates the value of working with a mortgage broker and reviewing your mortgage rate regularly. By refinancing to a better rate, they saved approximately $31,000 over the remaining life of their mortgage, even after accounting for break fees.

Your situation might be different, but the principle is the same. By shopping around and working with a broker, you can often find better rates and save substantial money over the life of your mortgage.

Ready to review your mortgage rate? Call Frontier Finance at 0413 798 731. Our brokers will compare rates across multiple lenders and show you how much you could save by refinancing.

Disclaimer: This case study is based on a realistic scenario but is fictional. Actual savings depend on individual circumstances, including current rates, loan amounts, remaining loan terms, and break fees. Please consult with a qualified mortgage broker to discuss your specific refinancing situation and potential savings.