An annual home loan review checks whether a client’s rate, loan structure and lender still fit their circumstances. For mortgage brokers, the outcome is a supported decision to stay, reprice or refinance, with the reasons recorded on the file.
What an Annual Home Loan Review Covers
A home loan review tests the existing loan against the client’s needs now, including how they use it and what it costs. Run a review once a year as a service baseline. Bring it forward for a fixed-rate or interest-only expiry, a rate change or changed circumstances such as parental leave or a planned move.
An annual cycle is a service commitment you choose and must deliver. The Australian Securities and Investments Commission (ASIC) states in RG 273 Mortgage brokers: Best interests duty: “The best interests duty does not require you to conduct a ‘periodic review’”. RG 273.118 also explains that the duty applies to credit assistance you provide during a later review.
Tell clients what the service covers and how to bring a review forward. A borrower asking, “Can you review my home loan?” needs an agreed next step even when the settlement anniversary is months away.
The Annual Review Checklist
Gather a recent loan statement and the latest rate notice before the call. Collect offset balances, remaining loan term, repayment details and fixed-rate or interest-only expiry details. Ask the client about changes to income, expenses, debts and their plans for the property.
Run the review in this order:
- Confirm the client’s circumstances and goals. Ask about employment changes, dependants, repayment pressure and plans to sell, renovate or borrow again.
- Establish the current loan position. Record the balance, actual rate, repayments, fees, offset balance and remaining term against the supporting records.
- Compare the rate. Match the loan against the lender’s new-customer offer for the same product and comparable products at other lenders.
- Check the structure. Test whether the offset, splits, repayment type and access to funds still serve the client’s goals.
- Decide the next action. Request repricing first, then assess refinancing where it could improve the client’s position, or explain why staying fits.
- Record the outcome. Save the comparison, recommendation and client’s decision, including any work still required.
- Diarise the next review. Add an earlier reminder for an expiry or other known trigger and confirm who will follow up.
If the statement conflicts with the client’s remembered rate, resolve the difference before estimating savings. When information needed for a recommendation is missing, collect it before making that recommendation. For review scheduling across the book, use the guide to managing client portfolios.
Checking the Rate Against the Market
Compare the client’s actual rate with offers for the same borrowing position, starting with their lender’s new-customer rate for the same product. Match owner-occupied or investment purpose, rate type, repayment type, loan size and loan-to-value ratio (LVR). LVR is the loan amount divided by the property’s value, expressed as a percentage.
Then compare suitable products from other lenders on the same basis. Include ongoing fees and the features the client uses. A lower advertised rate on a loan without the required offset is a different offer. Keep a copy of the rates and conditions used in the comparison.
With the client’s open banking consent, Track My Trail’s Refinance Finder puts the loan’s current rate and rate type beside its balance and offset. It also shows net balance, the gap to current lender rates and the date of the last update. You start the review with those figures in hand, then match the published offers to the client’s circumstances.
Use the update information to identify figures that need refreshing. The decision must use the client’s current position, including a changed balance or repayment arrangement.
Checking the Loan Structure
Check how the client actually uses the loan before carrying its structure into another year. Work through each feature that affects their costs or access to money:
- Compare offset balances with the loan balance and the cost of keeping the offset facility.
- Review fixed and variable splits against the client’s need for repayment certainty and extra repayments.
- Identify fixed-rate and interest-only expiries, the repayment change at expiry and whether the client can meet it.
- Confirm redraw access and restrictions, including whether the client relies on those funds for a planned expense.
- Check principal-and-interest or interest-only repayments against the client’s current objectives and remaining term.
- Ask about a planned move and whether loan portability needs to be considered before a sale or purchase.
If an interest-only period is ending, calculate the principal-and-interest repayment over the remaining term. Explain that result before recommending a rate change that leaves the repayment problem unresolved.
Repricing or Refinancing: Making the Call
Request a pricing review through the existing lender’s broker channel first, then give the client the outcome before deciding whether to move. Include the current loan details and comparable offers. Save the lender’s response and confirm when any approved rate takes effect.
The process depends on the lender. ANZ’s public pricing guide describes requesting discretionary pricing in ANZ Qualify and forwarding an existing-loan approval for implementation. Use the lender’s broker portal or business development manager for its current retention process.
If repricing does not meet the client’s needs, assess refinancing against the expected holding period. Include discharge and setup costs, any fixed-rate break costs and any new lenders mortgage insurance (LMI). Test serviceability and compare the remaining term with the proposed term. A longer term can reduce repayments while increasing total interest.
Moneysmart’s switching guide explains the costs to include and how to assess whether savings recover the cost of switching. Use written cost estimates for the client’s loan. The repricing versus refinancing comparison develops that choice, while the refinance timing guide covers cost recovery and timing.
Trail income and potential clawback must never shape your recommendation. RG 273.119 specifically addresses the conflict of recommending that a client stay to avoid clawback. When the client chooses to stay, record their reason and the alternatives you explained, even if their choice differs from your recommendation.
Documenting the Review
Record enough detail for another broker to understand the comparison and why the outcome fits this client. The file note must identify the figures compared, options considered, recommendation, client’s decision and next review date. Attach the supporting statement, rate comparisons, lender pricing response and cost estimates used.
A review becomes credit assistance when you suggest a particular credit contract or suggest that the client remain in their current contract. Helping them apply for a particular loan is also credit assistance, as explained in ASIC’s RG 203 Do I need a credit licence?. A recommendation to stay therefore needs current reasoning about the client’s interests.
For regulated credit assistance, apply the best interests duty and the applicable responsible lending process. Keep updated inquiries about the client’s requirements and financial situation, verification records and the preliminary assessment. Credit representatives work through their authorising licensee’s process. ASIC’s responsible lending guidance explains these steps.
Record why the recommended option benefits this client and explain any trade-offs. Use the best interests duty records guide for the fuller file requirements. Close the review only when the client has the outcome, the file explains the decision and any remaining action has an owner and follow-up date.
