Nearly half of Australia’s home owners with a mortgage are missing out on potential savings of $240 a month¹ by not refinancing their home loans to get a better deal, according to a new report commissioned by Aussie Home Loans.
The survey² of more than 1,000 mortgage holders showed 45 per cent have never refinanced their home loan. The most common reasons given include they think that they won’t get a better deal (29 per cent), haven’t thought about it / don’t know where to start (18 per cent), and believe it’s too time consuming (17 per cent).
Of the 53 per cent of respondents who have refinanced, on average it happened more than two and a half years ago. Chief Executive of Aussie, Mr James Symond, said with mortgage rates dropping significantly over the last few years, it’s high time mortgage holders reviewed their home loan.
“Our survey shows that many home owners could be missing out on great deals and potentially big savings. That’s money going to the banks and other lenders that Australians could instead be investing back into their mortgages or spending on things like holidays, eating out or their kids’ education,” he said.
“It’s not surprising that home owners don’t know where to start and think refinancing is time consuming, but that’s where a mortgage broker can help. Aussie brokers are now doing more refinance home loans than any other type of home loan, and that’s because our customers want an expert who’s on their side to get it done for them,” he added.
Three quarters (74 per cent) of respondents said they didn’t know how much money they could save by refinancing, especially women (82 per cent; men 67 per cent), however Aussie’s data shows its refinance customers save on average $240 every month.
Two thirds (65 per cent) of respondents said they would fill out some forms for an hour to save $240 a month, with younger Aussies aged 18-34 most keen on the savings (80 per cent; 50+ age bracket 54 per cent).
“Over half said they would use the savings to pay down their mortgages, which is a smart strategy as these extra payments can mean big savings over time,” he added.
The most common little luxuries home owners said they would splash out on if they saved money were meals out (50 per cent), special events like concerts (38 per cent), clothing (29 per cent) and presents for the kids (18 per cent).
If saving for a bigger purchase, their money would go towards holidays (57 per cent), home renovations (36 per cent) or a car (24 per cent).
Mr Symond said “There is red hot competition in the home loan market and lenders are fighting for market share with some offering attractive incentives to get customers to switch their home loan. It’s just smart for people to investigate whether they can get a better deal, whether by refinancing or simply asking your lender for a better rate,” he concluded.