A number of lenders have started dropping their interest rates despite the Reserve Bank of Australia tipped to hold the official cash rate at 4.35% at its May meeting.
Lendi Group COO and co-founder Sebastian Watkins said borrowers that have been suffering through a brutal run of interest rate increases can - and should - do something about their personal rates to avoid being whacked with a loyalty tax.
Mr Watkins said: “It isn’t as hopeless as it feels at times out there, the tide is turning, but you need to know where to look. If you have an interest rate with a seven in front of it, or even in the high 6’s like many customers coming to me, there is plenty to be saved.”
Nationally, the average mortgage rate is currently 6.8% with the average mortgage size at $624,000. Based on these numbers, the average homeowner with a $624,000 loan who refinanced right now, could save around $300 every month.
Mr Watkins said: “The improved rates are usually offered to new customers, but not exclusively, so it is always worth reviewing your rate and speaking with professionals to ensure you are not getting a loyalty tax with your existing lender”.
Savings to be made when switching from a rate of 6.8% to 5.99%, based on a 25-year loan term.
Mortgage | Repayments at 6.8% | Repayments at 5.99% | Monthly Savings |
$600,000 | $4164 | $3862 | $302 |
$700,000 | $4859 | $4506 | $353 |
$800,000 | $5553 | $5150 | $403 |
$900,000 | $6247 | $5793 | $453 |
$1,000000 | $6942 | $6437 | $504 |
Mr Watkins said: “Even shaving .25 bps off your current rate will save you around $100 a month, or $1200 across the year. It’s well worth having the conversation and considering switching so that it is you benefitting and not your current lender.”
About Aussie
Aussie was founded in please visit 1992 and was widely credited for bringing competition to the Australian home lending industry. For nearly 30 years, Aussie Brokers have put progress within reach of more Australians, helping over one million customers with their home loan. Today, Aussie is part of the Lendi Group; and has the largest retail brokerage footprint across Australia. For more information about Aussie, please visit Aussie.com.au or call 13 13 33