Mortgage-holders are being advised to take advantage of record-low interest rates and refinance if they haven’t already done so.
43 per cent of Australian mortgage-holders are looking to refinance to a better rate, taking advantage of a record-low cash rate.
By comparison, a survey revealed that 19 per cent of borrowers were looking to refinance, following the banking royal commission. That’s more than double in just two years.
It was highlighted that mortgage-holders are no longer tolerating overpaying for their mortgage.
The loyalty tax gets worse the longer you stick with your bank.
It’s taken a pandemic to get people to shift their mindset, but hopefully we’ll come out of it more budget-conscious and less complacent towards our mortgages, the large financial institutions are willing to fight for consumers, meaning mortgage-holders can take advantage.
The banks are pulling out all the stops, too, putting some of the biggest cashback offers and rock-bottom rates on the table and adding more flexibility on fixed-rate loans to attract new business – and it is working.
The best way you can get a rate cut is to turn yourself into a new customer and switch. If you aren’t in a position to refinance, pick up the phone and try some old-fashioned haggling with your bank.
How much can a mortgage-holder save?
Existing owner-occupiers are paying over 1 per cent more than the lowest variable rate in the market.
If they switched to the lowest ongoing variable rate, that’s a saving of $2,805 in the first year, and $19,235 over five years, including switching costs, on the typical $400,000 loan.
This is based on an owner-occupier who switched five years into a 30-year loan.
You can arrange a convenient time to speak to Jesse Bruno, our mortgage broker at Centra Money by clicking here.
Article reproduced from Nest Egg by Cameron Micallef
