In a world where it’s hard enough to remember your partner or best mate’s mobile number, should Australians be expected to know that their home loan interest rate is?
Well according to new figures released as part of UBank’s 2019 Know Your Numbers Index, a significant number of Aussies would have as good a chance putting a figure on the number of craters on the moon as they would identifying the interest rate on their home loan.
Okay, maybe those two aren’t quite comparable.
Nonetheless, approximately 36% of those surveyed by UBank, “...simply didn’t know their rate at all.”
The good news is that, when it comes to home loans, Australians’ financial literacy is actually on the rise as 25% of respondents were able to accurately recall their mortgage rate - up from just 14% in 2018.
Furthermore, 64% of Australians that took part in the survey remembered the approximate figure for their home loan rate.
"While there was an improvement on last year, there are still too many Aussies out there who don’t know their mortgage rate,” said Lee Hatton, CEO of UBank.
Are Aussies missing out on refinancing rewards?
So aside from being a great conversation starter at parties, what’s the actual use of knowing your rate?
According to UBank, one of the major benefits of being familiar with your home loan interest rate is that it provides borrowers the knowledge of where they sit compared to other rates on the market, and gives them a better chance to refinance their loan to a better rate.
“We encourage people to do their research and stay on top of their mortgage rate, as thousands of dollars can be saved by simply understanding where the best offers are and refinancing,” said Hatton.
With the recent back-to-back RBA cuts and the potential for further cuts to come in the near future, competition amongst lenders has certainly heated up and could well continue to do so in the months ahead.
In fact, as of the start of the month, 58 of the 88 lenders in the Mozo database (66%) were now offering a home loan rate below 3.50%.
“Lenders have been slashing rates left and right, so if you haven’t already, now is the time to take advantage of the heightened competition in the market by comparing refinancing options and locking in a better rate,” said Mozo Director, Kirsty Lamont.
Just how much could a borrower save by refinancing their home loan though?
Let’s use the Mozo home loan repayments calculator to work out how much fictional borrower Julie - who has a $300,000 home loan with 25 years remaining to pay it off that’s currently on a variable rate of 3.50% - could save by refinancing.
According to the repayments calculator if Julie refinanced to a lower rate, for example UBank’s UHome Loan with a 3.09% interest rate (3.09% comparison rate*), her monthly repayments would drop from $1,502 to $1,437 ($65 less).
Plus she’d save $19,546 in interest over that 25 years!
Got your home loan rate in hand ready to compare your refinancing options? Check out some of the hot deals in the table below (including UBank’s offer), or to compare even more offers head over to the Mozo home loan comparison hub.
Refinance home loans - last updated January 16, 2021
^See information about the Mozo Experts Choice Home Loans Awards
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