A survey released by Aussie today has found that almost one third of Australians with mortgages have no idea what interest rate they pay, despite the ongoing consumer concern about mortgage stress and stagnant consumer confidence.
This figure is further compounded with almost the same percentage of property investors unaware of their interest rates, even as they seek to secure their financial future through property.
Disturbingly, of those who did know, almost a quarter were paying too much.
The survey, undertaken by Nine Rewards, asked Australians in an Omnibus survey*: How precisely do you know the interest rate you are paying on your mortgage? Please enter your current interest rate and type.
A surprising 32.8% of home owners and 29.5% of investors were unable to even guess at their interest rate.
"This statistic is really worrying," says Aussie Founder and Chairman John Symond. "Even if the RBA doesn’t move interest rates, people need to be constantly questioning their rate. It could be just by speaking to their broker about a simple mortgage health check to see how much they could save."
Of those surveyed who were able to nominate their interest rate within a quarter percentage band, an astounding 23.5% of homeowners and 23.2% of property investors were paying more than 7.0%, which was the band that included the interest rates of the big four banks (7.01-7.09 per cent) in April, when the survey was done. Now it is closer to an average 6.5 per cent interest when the official RBA cash rate is 3.5 per cent, and variable loans of around 6.0 per cent or even less are not uncommon.
Symond continues: "Those who have had less than half a per cent rate cut on their variable rate since November or pay more than 6.5 per cent are simply out of market.
"When you consider the savings between 7.0 per cent and 6.0 per cent on a home loan of $300,000 is around $197 per month, and take that over the life of your loan, that is about six years and eight months cut from the loan term and several thousand dollars saved in repayments. I urge all borrowers to be more attentive to their home loan rate."