How your home loan could see you losing thousands of dollars a year
Article by Monika Gudova
Aussies sticking with the big four after their recent rate hikes run the risk of missing out on over $2,000 a year in savings, according to Mozo research. This means that as a whole, Australians could lose a combined $7.02 billion^ in interest savings a year, or $19 million a day.
This has come after ANZ, the Commonwealth Bank and Westpac hiked their variable home loan rates in recent weeks, citing an increase in funding costs as their reason.
A borrower with a big four bank home loan is now paying up to 143 basis points more than the lowest ongoing rate in Mozo’s database of 3.44%*.
This means you could be paying $250 dollars more a month in interest repayments alone compared to those on the lowest home loan rate.
“Loyalty and lethargy are keeping Australians wedded to the big four banks with as much as eight in 10 of us able to say we bank with a big four,” said Mozo Director Kirsty Lamont.
“However, our propensity to stay put is costing us big time especially on the mortgage front. Australia - if your big bank has upped your rates, it’s time to take back your loyalty.”
Making a switch to the most competitive deal in Mozo’s database could save the average big four customer thousands of dollars a year, depending on what bank they’re with.
ANZ, Westpac and the Commonwealth Bank customers stand to lose close to $3,000 a year in interest.
Even NAB customers, who may be relishing the banks decision to keep their rates steady for the moment, could save $1,961 in interest a year by switching to the lowest rate in Mozo’s database.
“The good news is big bank mortgage holders simply don’t have to cop higher repayments on the chin. Mozo’s database shows 57 lenders are yet to hike home loan rates, indicating there are still competitive rates to be found is borrowers are prepared to look,” said Lamont.
So how do I switch home loans?
If you’re looking to move away from the big four in search of a more competitive home loan rate, you can kick off your search by following these easy steps:
1. Fill out your details in our switch & save calculator. For a closer estimate of how much you could save by switching lenders, use our switch & save calculator. You’ll be asked to enter information about your property and current home loan.
2. Choose a home loan offering a great rate. Once you’ve filled in the blanks, you’ll get a list of results that’ll help you find a home loan deal that suits you, and more importantly, how much you’ll save by switching to it.
3. Start your application. Once you’ve landed on a home loan that ticks all the boxes, you can start your refinancing application by clicking on the ‘go to site’ button. Keep in mind you’ll have to have a few things ready, such as a your proof of income and bank account statements.
Has your bank just hiked its home loan rates? Head over to our home loan comparison table to get started on your home loan refinancing journey.
^ Mozo compared the typical variable loan rate of each of the Big 4 lenders against the best rate on the market to find the potential savings per customer and then multiplied this by the estimated number of variable owner occupier customers at each lender to come up with a collective figure of savings. Rates are based on an 80% LVR loan of $300,000 to owner-occupiers over a 30-year term.