Home loan hack: How 15,000 Aussies have saved $90 million in 9 months

Adam Grocke, Founder and Chief Executive Officer at Sherlok

How much is a good mortgage broker worth? If you have a mortgage and the broker is using the AI tech platform Sherlok, it could save you tens of thousands of dollars a year. New data from Sherlok has revealed more than 15,000 Australians have saved a combined $90m on their home loans in nine months, by having savvy mortgage brokers negotiate with lenders to reprice mortgages on behalf of clients, when their rate becomes uncompetitive.

What is the market offering of Sherlok?

How it works: Sherlok uses an AI algorithm to identify borrowers who are no longer on the most competitive rate they can be. It then contacts the broker who approves the platform to negotiate a reprice directly with the same lender. The client doesn’t have to lift a finger.

They will be surprised to hear their interest rate has been reduced and can rest assured knowing their rates are constantly being monitored will always remain at a competitive rate.

Repricing means switching to a new home loan package with the same lender, as opposed to refinancing which refers to closing your current home loan account and setting up a new home loan account with another lender. The firm’s data reveals Aussie homeowners on an average home loan of $450,000 who haven’t reviewed their mortgage in 1-3 years stand to save as much as $3,500 per year by repricing their home loans with their current lenders.

That comes to a savings of $44,000 over the life of the average loan. After just 1 year from settlement of a loan, a client that has not reviewed their interest rate could be paying as much as $2,600 more on the same average loan size. The worse it gets for borrowers. After 5 years, that figure jumps up to $4,500, which is an increase of more than 1% of the loan. 

What were the executive’s thoughts on Sherlok?

“My advice to homeowners is to get on the phone with your broker and find out if you’re eligible for a reprice. If your broker is using tech like Sherlok, they could potentially cut your interest rate and offset the recent rate rises,” says Sherlok Founder and CEO Adam Grocke. 

“Things are not easy at the moment for many people financially, and it would hurt people to know that they are probably paying more than they have to on their mortgage. The 2019 ACCC-directed home loan price inquiry factually proved that the longer a customer is with the same lender, the higher their interest rates will be, compared to a new customer.”

“Don’t get stuck with loyalty tax. Our data shows that even a small rate reduction on a large loan can save a significant amount. Have a conversation with your broker as soon as possible. I founded Sherlok in 2020 to provide mortgage brokers with single click repricing and refinancing, making it easier for them to keep clients on competitive rates.”

“We’re helping Australians save money on their home loans by supporting brokers with our technology. This month alone our reprices have saved homeowners a total of $1.6 million annually which is almost $20mil for life of loan savings,” Adam Grocke further commented.

What is the mortgage landscape in Australia?

Recent Sherlok case studies 

  • Rate reduction from 4.14% to 2.69% on a $1.1m mortgage gave a savings of $16,715. This was the largest estimated annual savings for this month to date with broker Ahmad Rachid at Options Financial

  • Rate reduction from 2.69% to 2.19% on a $2.48m loan saving the customer $12,380 per year

  • Another reprice from 5.21% to 3.93% produced a saving of $4,786 per year on a loan size of $378,000

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