What are the odds you’re over paying? The ultimate rate guide

The RBA kept the cash rate on hold today, but after three cuts this year most home owners are now paying the lowest rate of their lives.

The problem is, many people assume their new lower rate means they're getting a good deal, when in fact they're not.

RateCity has compiled the average and lowest rates from 100+ lenders.

Check your rate - are you a winner or loser?

Note: Rates are based on a loan size of $400,000 with a 20% deposit.

P&I is principal and interest repayments, IO is interest only.

Now let's turn these numbers into dollars.

If the average owner-occupier paying principal and interest with a $400,000 loan switched to the lowest available rate, they'd save $239 per month, $2,868 per year.

Savings when refinancing from average to lowest rate - owner-occupier (P&I)

Note: Calculations are based on a 30-year home loan with a 20% deposit and do not factor in fees.

RateCity.com.au research director Sally Tindall said three RBA cuts this year means most home owners are on a competitive rate, but despite this, they could be overpaying.

"A lot of people are still in the mindset that a rate below 4 per cent is pretty decent, but the truth is there are much better deals out there.

"There are now 24 lenders offering variable rates starting with a two.

"Don't put refinancing in the 'boring bank stuff' category.

"Getting your paperwork in order can seem tedious, but it probably pays a far better hourly rate than working overtime," she said.

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