Despite interest rates going up and down like a snakes and ladder board in the last two years, the majority of Australians have not looked to refinance their home loan – potentially costing thousands of dollars by not doing so.
According to new research commissioned by Aussie, only 7.2 per cent of respondents refinanced their mortgage as a result of the latest series of rate rises which began in October last year.
But of that small group, 80 per cent of them said they got a better deal than the one they had been on previously, with the majority of these saving between $100 and $299 per month.
The research, which was conducted online in late July by consumer insights firm Brandmanagement¹, showed that more than half of the respondents think refinancing will actually cost them money rather than save them money.
Almost 16 per cent say they “couldn’t be bothered” refinancing, and 12 per cent say they are happy with their current deal.
Aussie founder and Executive Chairman John Symond said homeowners looking for a better deal should check out online tools to help them evaluate their position, like Aussie’s market leading online home loan comparison tool, the 1-Minute Mortgage Calculator.
“It’s crazy to be paying a higher rate, or paying for features on a home loan that you don’t use. In just one minute, you could find out if there is a better deal from a range of lenders – one that means more money in your pocket.”
Mr Symond said the tool was helpful to first homebuyers or homeowners looking to re-finance their existing loans.
“For example, a family paying off a $400,000 loan paying 7.1 per cent interest could find a loan with a cheaper rate and save them approximately $4275² in loan repayments in one year,” he said.
1. The survey was conducted online in late July 2010 with 835 respondents by market research firm Brandmanagement. 2. Potential savings will depend on your circumstances, including any break fees that may apply to your current loan and your eligibility to refinance. This is based on information available as at 09/09/2010, and is subject to change with variation in rates.