Australian mortgage holders can save money and reach their goals sooner by refinancing
If you’ve been wondering whether to switch home loans but haven’t come to a decision yet, you might be interested in some research findings from the Aussie Home Loans’ Refinancing report*. Commissioned by Aussie to investigate what Australian mortgage holders think about refinancing, it contained a few surprises – and plenty of good news for mortgage holders.
The report surveyed over 1000 mortgage holders across Australia. Nearly half (45%) had never refinanced their home loan.
The main reason for this, among those who’d never refinanced, or who’d refinanced more than four years ago, was the belief that they wouldn’t get a better deal. Nearly three quarters (74%) of respondents didn’t know how much they could save by refinancing.
But the benefits can be substantial. According to Aussie’s figures, they saved their customers $240 a month on average, or $2880 a year, by refinancing over a 30-year loan~. And when asked if they’d spend an hour doing paperwork to save $240, 65% of respondents said yes!
It seemed easier to decide how to spend the savings though. Over half (55%) said they’d use the savings to pay down their mortgage; 29% would put it towards a bigger expense; 11% would spend it on little luxuries (6% weren’t sure). The most popular big expenses were a holiday (57%), home renovations (36%) or a car (24%).
The savings could also help home owners regain some of the things they might have given up or cut back on to help pay their mortgages, like eating out (71%), nights out (67%) or holidays and travel (66%).
But not all mortgage holders are the same. NSW residents, for example, believed they’d save the least (they guessed only $164 per month; the national average was $259). Australians aged 18–34 were the most likely to fill out forms to save $240 a month (80%; the national average was 65%). Meanwhile women were less likely to know how much money they could save by refinancing (82%; men were 67%).
The report paints a picture of mortgage holders who are willing to make sacrifices to pay off their debts, responsible in their spending and prudent in their consideration of how to use extra funds.
Why not take advantage of today’s low interest rates and explore the possibility of saving money by refinancing your home loan? A mortgage broker can help to make the process simple and the benefits are clear. Call Aussie today.
Have you refinanced your mortgage recently? How did you use your savings? Let us know in the comments below.
* The study was conducted among 1,037 Australian Home Owners with a Home Loan aged 18+. Fieldwork commenced on Tuesday, 29th March and was completed on Friday 1st April 2016. This study was conducted online amongst members of a permission based panel. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.
~Based on Aussie customer Needs Analysis data for the period January 2012 to September 2015 for 1,787 customers who refinanced to a lower interest rate, calculated over a 30-year loan term.