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The annual loan review no bank will give you.
William Sun · May 2026
Banks employ large teams to monitor whether their existing clients might be thinking about leaving. They do not employ teams to proactively tell those clients their rate has drifted above market and they should probably ask for a discount or refinance. The incentive structure doesn't support it. A lender that volunteers a rate reduction before it's asked for is giving away margin it was already collecting.
This isn't cynicism about the banking industry. It's just an accurate description of how the commercial relationship works. Your lender wants your loan to keep performing. You want your loan to keep costing you as little as possible. Those are not the same objective, and only one of you has daily visibility into what the market is currently offering for your profile.
Why the gap opens
When you first took your loan, you were assessed, approved, and priced at a rate that was competitive for what you looked like at that moment — your LVR, your income, your profile. Over time, several things happen that a lender won't mention to you.
Your LVR has probably improved. If you've made regular repayments and the property value has risen, you may now be sitting at 65% LVR on a loan that was written at 80%. Many lenders have better pricing for lower LVR loans, but they don't automatically apply it. You'd have to ask — or refinance to a lender who prices your current LVR properly.
New-customer campaigns have run. Every quarter or two, lenders run promotions to attract new borrowers. The rates in those campaigns are often sharper than what existing borrowers are sitting on. The loyalty tax is the gap between what you're paying and what a new customer with your identical profile would be offered today.
The market has moved. The RBA has cut or raised, wholesale funding costs have shifted, and the competitive landscape among lenders has changed. Your rate may have moved with the RBA — but the starting spread above market that was set when your loan was written might still be there.
What a useful annual review covers
Your current rate against today's market
Not the average variable rate in the news — the rate available from accredited lenders for a borrower with your LVR, income type, loan size, and repayment structure. Your profile determines your market rate. Comparing your rate to a headline average tells you very little.
Your loan structure against your current situation
The structure that made sense when you bought may not be optimal now. A principal and interest loan taken out as an owner-occupier looks different once a property becomes an investment. An offset account you weren't using is dead weight on a fixed loan. Structure is reviewed as carefully as rate.
The cost of moving against the gain
If the review identifies a better rate elsewhere, the net benefit after refinancing costs — discharge fee, application fee, any legal costs — is calculated explicitly. If the numbers support moving, the review says so. If they don't, the review says that too.
Your equity and what it enables
Equity that has built up since purchase can be accessed for renovation, investment, or debt consolidation — if doing so makes structural sense. The annual review is also the time to look at whether your borrowing capacity has improved enough to support the next move, if one is on the horizon.
Three outcomes, one of which is fine
A useful review ends with one of three conclusions. First: your loan is well-structured and competitively priced — hold. No action required, confirmed in writing. Second: your structure should be adjusted but switching lenders isn't worth the cost — restructure with your current lender. Third: the gap is large enough and your circumstances support it — refinance.
The first outcome isn't a failed review. Knowing your loan is in good shape is worth the forty minutes it takes to confirm. What a review should never produce is the fourth outcome — no review at all, no comparison made, and a loan that quietly drifts further above market for another twelve months.
Every loan we settle includes a written annual review for the life of the loan. The review is not contingent on refinancing. It is not contingent on anything except the loan existing and twelve months having passed. It is the check your bank will never give you, provided in writing, every year, at no charge.
About the author
William Sun
Principal Mortgage Broker · Brilliant Finance Solutions · Est. 2017
William Sun is the principal of Brilliant Finance Solutions, a Sydney mortgage practice established in 2017. He holds Credit Representative Number 498730, authorised under BLSSA Pty Ltd Australian Credit Licence 391237, and is a member of the Finance Brokers Association of Australasia (FBAA M-333308). Every client engagement begins with a written Strategy Memo — a structured assessment of loan options before any lender is approached.
About the practice →The conversation
Start with a written assessment, not a sales pitch.
Fourteen minutes — long enough to understand your situation, short enough to respect your time.