September update: Reserve Bank leave rates on hold at 2.5%
Homeowners may have been denied a rate cut at today’s Reserve Bank board meeting, but new research from Australia’s leading financial comparison website, RateCity (www.ratecity.com.au), shows that the many borrowers could save $1560 per year by refinancing.
Alex Parsons, CEO of RateCity, said more than 80 percent of borrowers hold home loans with the major banks and many are likely to be paying over a thousand dollars more than necessary.
“A typical borrower with a $300,000 home loan could potentially free up more than $1500 a year by switching from the average of the big four banks’ basic variable home loans into one of the cheapest variable rates in the market,” he said.
“That’s the easiest $1500 you could save this year. Where else can you free up more than a thousand dollars in your household budget without having to make major cut backs?
“It represents a huge boost for families. It could mean easing financial pressures this Christmas, getting your daily takeaway coffee for free all year or paying off your home loan years earlier!
“If your home loan rate has a 5 in front, you’re probably paying too much and it’s time to ask your lender for a discount or consider refinancing into a comparable mortgage with a more competitive rate.”