COULD YOUR MORTGAGE RATE BE HOLDING YOU BACK? THIS NEW TOOL WILL ROAST IT

A new Finder tool lets Australians put their home loan rate to the test, with borrowers able to choose just how brutally honest they want the verdict to be.

Paying off a mortgage early is becoming a serious goal for many Australian homeowners, but one question is worth asking along the way: is your interest rate helping you get there, or quietly holding you back?

New research from Finder suggests one in four mortgage holders – around 825,000 Australians – expect to be completely debt-free within five years.

For some, the finish line is even closer. Three per cent expect to pay off their home loan within the next year, while another seven per cent expect to do it within one to two years.

Now Finder has launched Roast My Rate, a free online tool that tells borrowers how their current mortgage rate compares with other rates on the market.

Finder will tell you if your mortgage rate is getting roasted

The tool asks borrowers for a few details about their home loan, including their current interest rate, loan balance and how many years they have left.

They can then choose how “spicy” they want the feedback, from a gentler assessment to a more brutal verdict.

It is essentially a mortgage health check, but with considerably more attitude.

A small difference in your rate can add up

Finder's analysis suggests seemingly small changes in an interest rate can make a big difference.

On a $500,000 loan over 30 years, Finder says a difference of just 0.50 percentage points in the interest rate can add up to more than $58,000 over the life of the loan.

Richard Whitten, home loans expert at Finder, says paying off a mortgage early can significantly impact a household's finances.

“Once your home loan is gone, hundreds or thousands of dollars a month can be redirected towards investing, super, travel or simply having more freedom over how you spend your money,” he says.

But he says becoming mortgage-free does not necessarily mean putting life on hold in the meantime.

“There’s a balance between aggressively paying down your mortgage and still enjoying your life today,” Whitten says.

Australians are looking for a faster route to mortgage freedom

The research suggests Australians no longer necessarily expect to leave paying off their family home until retirement.

Whitten says having a clear target, making extra repayments where possible and using an offset account can all help borrowers bring their mortgage-free date forward, depending on their circumstances.

“Even a small improvement in your interest rate or a change to your repayment strategy can shave years off a home loan,” he says.

For anyone who hasn't checked their mortgage rate in a while, Finder's new tool offers a fairly simple place to start.

And if the result is less flattering than expected, at least you get to choose how badly you want to be roasted.