Property prices have surged over the past couple of years and, depending on where you live, the equity you own in your home may have changed drastically.
New research commissioned by Reduce Home Loans ranked the top 20 ‘mortgage belt’ suburbs in Australia by how much mortgage holders could save if they refinanced.
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To establish the ranking, the research sorted suburbs by the estimated number of houses with mortgages, to identify suburbs in the ‘mortgage belt’.
Second, the research assumed that, in June 2019, buyers had purchased a house and:
- Paid the suburb’s median house price at the time
- Borrowed 90 per cent of the purchase price
- Taken out a 3-year fixed loan at 3.84 per cent (the average 3-year rate at the time)
Third, the research made a series of calculations for June 2022:
- How much the owner’s houses would be worth
- How much estimated equity they would have in their house
- What their estimated outstanding loan balance would be
- What their monthly repayment would be if their 3-year fixed loan had reverted to a variable rate of 4.75 per cent
- How much they could save if they refinanced to a variable rate of 4 per cent
- How much they could save if they refinanced to a variable rate of 3 per cent
Finally, to establish a top-20 ranking, suburbs were ranked based on how many local houses were mortgaged (from highest to lowest).
Reduce Home Loans general manager Josh Beitz said the research was timely given that a host of borrowers were nearing the end of their fixed-loan terms.
“Some borrowers who have reverted, or will soon revert, from a fixed to a variable loan might find themselves on a higher interest rate which, of course, would be concerning,” Beitz said.
“It’s important for those borrowers that can afford the rollover rate not to be complacent.
“That’s why borrowers should seriously consider refinancing now to a comparable loan with a lower interest rate because, as rates keep increasing, borrowers can become ‘mortgage prisoners’ unable to escape spiraling interest rates.”
Top 20 suburbs for refinancing
Here are the rankings for the top suburbs where Aussies should consider refinancing, and how much they could save:
- Point Cook, VIC – $175,501
- Craigieburn, VIC – $152,101
- Tarnei, VIC – $152,101
- Berwick, VIC – $188,591
- Baldivis, WA – $98,469
- Sunbury, VIC – $144,075
- Kellyville, NSW – $295,560
- Werribee, VIC – $143,266
- Dubbo, NSW – $98,405
- Truganina, VIC – $154,011
- Clyde North, VIC – $157,910
- Canning Vale, WA – $144,306
- Melbourne, VIC – $69,031
- Doreen, VIC – $158,938
- Narre Warren South, VIC – $174,359
- Orange, NSW – $110,922
- Hoppers Crossing, VIC – $148,041
- Rowville, VIC – $206,180
- Castle Hill, NSW – $361,427
- Wyndham Vale, VIC – $130,133