The Reserve Bank may have left rates on hold today but mortgage holders are urged to take matters into their own hands if they are unhappy with their rate.
RateCity research shows that the cost of staying with the big four banks over the past 10 years, rather than switching to one of the lowest rates was $14,215 for someone with a 300,000 mortgage, and $23,692 for a person with a $500,000 mortgage, based on a 30 year loan term.
RateCity money editor Sally Tindall said that around three quarters of variable mortgage holders would be paying extra from this month, despite today’s announcement.
“The big four banks will all be lifting their variable rates this month by as much as 0.20 percentage points.
“Meanwhile, some of the smaller lenders are continuing to lower rates, particularly for owner occupiers.”
Tindall said customers can take matters into their own hands.
“RateCity data shows that over 10 lenders were offering rates of under 4 per cent – that’s a lot of competition at the pointy end of the market vying for your business,” she said.
Tindall said that some people were hesitant to switch from a major bank due to loyalty, hidden administration fees and a potential drop in customer service.
“It’s actually never been easier to switch,” said Tindall.
“The ban on exit fees in 2012 and the emergence of new players has seen competition in the home loan space really open up.
“The cost of switching is relatively small change. Our data shows that the average cost of upfront fees is $421, while 430 loans on the market have no upfront fees at all.
“Recent Roy Morgan research shows that home loan customer satisfaction for smaller lenders is actually higher than for the big four banks, so you might be pleasantly surprised by a lift in customer service, if you decide to switch,” she said.
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