According to Canstar modelling reported this week, about a quarter of all borrowers are paying 6.5% or more on their variable rate loans, which is significantly higher than the lowest loan rate.
The inability of these mortgage holders to shop around for a better offer will result in thousands of dollars in additional yearly mortgage repayments over the course of a typical $500,000 loan.
“While refinancing to the lowest rate loan in the market may not always be possible, there’s still a wide range of loans offering big savings”, Steve Mickenbecker a finance specialist for Canstar said.
Canstar’s observations come as The AFR Banking Summit this week heard testimony from Westpac CEO Peter King, who said he was witnessing “the most competitive market I’ve seen in mortgages in my career”.
“You have to play because if you don’t, your book will shrink very quickly in terms of the overall dynamic”, King said.
The intense competition is good for borrowers seeking to refinance their mortgage as it means borrowers should easily be able to achieve a better deal.
To compare hundreds of loans and potentially save thousands of dollars in annual mortgage repayments, customers can use the MacroBusiness Compare n Save home loan comparison service.
If you decide to move forwards with an application, the Compare n Save staff will take care of everything.
Try the Compare n Save comparison service for yourself. It is quick and easy to use.
Compare 100s of loans in seconds, hassle free…..
and when you’re ready to apply, we’ll manage the process for you.
I Want To Refinance
I Need A Loan
For instance, if you are looking for a lower rate on an existing mortgage, select “I Want To Refinance” and input the amount you wish to borrow and the interest rate you are now paying.
Following that, Compare n Save will provide the amount you could save by refinancing.
Browse the loans that are available, and if you decide to move forwards with an application, just click the Enquire button, provide your contact information, and someone from Compare n Save will get in touch with you to start the process.
Consider someone who wants to refinance a $750,000 loan on a $1 million home with a 6.5% interest rate as an example.
This borrower could save $655 per month ($7,860 a year) by refinancing to the lowest rate on offer:
The Compare n Save comparison tool provides a list of hundreds of loans for comparison, ranging in cost from lowest to highest.
MacroBusiness will receive a portion of the commission if you get a loan through Compare n Save, which will be used to support the website.
For hundreds of thousands of borrowers leaving low-cost fixed-rate mortgages, the upcoming months will be difficult.
But at least by making sure you pay the lowest rate, you can limit the damage.
Make banks compete with each other for your business.
