Home owners have been battling rising interest rates for over a year and a half now. But a new report reveals the important step some savvy borrowers are taking to rein in higher rates and swap “oh no!” for “ho, ho, ho!”.
It’s no secret that refinancing has the potential to slice a big chunk off your monthly loan repayments.
And according to Canstar, 1 in 10 mortgage holders chased a better deal in 2023 and switched to a new lender to save on their repayments.
But what’s surprising to us is that 9 in 10 didn’t.
So what’s holding them back? Let’s dive in.
Some score a discount, others don’t
To be fair, many home owners have been on the front foot this year.
According to Canstar, 1 in 5 home owners with a mortgage have negotiated a better rate with their current lender – which is great news.
Having a chat with your bank can be a fuss-free way to save, especially if they come to the party with a rate discount.
A further 14% of home owners say they have tried to switch to another lender but weren’t able to do so because they didn’t have enough equity, or didn’t meet the new lender’s requirements.
That’s why it pays to speak with us before talking to a lender.
We have in-depth knowledge of different banks’ lending criteria, so we know which lenders are likely to give you the green light for a better deal.
Too many borrowers wearing higher rates
The thing is, there are plenty of home owners who have just copped rising rates without taking action.
As Canstar puts it: “Too many borrowers remain complacent even in the face of rising repayment costs”.
The scary thing is, half (49%) of Australia’s home owners with a mortgage don’t intend to change lenders at all.
Some believe they have a good interest rate. But as many as 1 in 5 think refinancing is too hard.
Busting the myths
Let’s sort some facts from fiction.
First up, it’s great if you think you are paying a competitive interest rate. The key is to know for sure.
Right now, variable home loan rates are anywhere from 5.69% (very rare) through to 9%-plus.
With that sort of range, there’s plenty of scope to save, especially as lenders often make lower rates available to new customers.
There is an easy way to know if you’ve got a good rate: pick up the phone and call us.
And if you’re worried that refinancing is hard work, rest assured that we’ll do the bulk of the leg work for you.
We’ll sort through hundreds of home loan options to find the loan that’s right for your needs. We’ll also make the paperwork easy, liaise with your old lender, and your new bank. Simple.
So if you’re keen to find out if you can do better with your home loan these summer holidays, give us a call and we’ll help you put your best foot forward going into 2024.
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