Did you know that 2 in 3 Australian mortgage owners think about switching their home loan to another lender? Have you thought the same?
According to the Australian Bureau of Statistics (ABS), a report commissioned by the Australian Banking Association (ABA) has discovered that 66% of mortgagors have considered switching to a different lender.
Despite the majority sentiment to shop around, only 5% of borrowers went through a refinance process in 2018.
The report highlighted key factors that drive refinance decisions:
- Lower interest rates
- Lesser fees
- Better mortgage terms
- Features such as offset accounts or redraw
- Fixing part of the loan
Borrowers who decided to remain with their current lender did so in light of cost and effort involved in switching; remaining ‘satisfied’ with their current lender. With competition between lenders so strong, loyal borrowers are being encouraged on all fronts to shop around for a better deal.
Refinance and save
Australian home owners could save tens of thousands of dollars – money in your pocket – by switching from a rate starting with a 4 to one starting with a 2.
A Reduce Home Loans customer saves, on average, $230 per month. If fees are paid upfront, it takes less than 3 months on average for the savings to offset the fees. (^Data based on average Reduce loan size of 440,000 over 30 years).
What would you do with the savings?
ABA Chief Executive Anna Bligh stated that the report reveals competition is still strong between bank and non-bank lenders.
Bligh encourages borrowers to shop around. “The message to all Australians is if you aren’t satisfied with your home loan… it pays to shop around and get the best deal possible”.
Reduce Home Loans continues to offer competitive rates among the lowest of the low; with owner occupier variable comparison rates starting from 2.71%(1)
Think about how often you review your other finances and budgets. Home loans should fit in with your whole budget strategy.
Use our calculator to compare interest rates and loan terms to see how much you could save with a rate starting with a 2.
You’ll be surprised.