Capital City Showdown: Where Savvy Switchers Could Save Almost $10,000/Year

KEY SAVINGS FIGURES:

• Sydney: Owner Occupiers $8,439/year Investors $9,440/year
• Canberra: Owner occupiers $6,547/year Investors $7,324/year
• Melbourne: Owner occupiers $5,981/year Investors $6,690/year
• Brisbane: Owner occupiers $5,735/year Investors $6,415/year
• Adelaide: Owner occupiers $5,238/year Investors $5,860/year
• Hobart: Owner occupiers $5,115/year Investors $5,723/year
• Perth: Owner occupiers $4,664/year Investors $5,217/year
• Darwin: Owner occupiers $3,808/year Investors $4,260/year

Mozo analysis reveals Sydneysiders stand to save the most by refinancing their variable rate home loan, based on the latest Core Logic Home Value Index released today. Property investors in Sydney could save an incredible $786/month or $9,440/year by switching to a lower variable rate, while Sydney owner occupiers are not far behind, with savings of up to $703/month or $8,439/year on offer if they switch to a lower rate.

The data experts at Mozo, using the latest Corelogic house values as a reference point, also found regardless of which capital city you live in, switching to a lender with a lower rate could save you thousands every year.

“By switching from the average variable rate of 6.60% to the lowest rate of 5.54%, investors and homeowners across Australian capital cities could save $474/month, which equates to more than $5,691/year,” Mozo spokesperson Rachel Wastell explained. 

“By comparing home loan rates on offer, you really can save thousands, as that $400-700 difference in monthly repayments really adds up,” Wastell continued. “In Sydney, for example, investors switching from the average variable rate to the lowest rate could save almost $10,000 a year. This is a substantial amount of money to put away during a cost of living crisis.” 

Wastell stresses the importance for both property investors and homeowners to compare home loan rates to see if there is a better deal out there. “This is money that could be put away in a high interest savings account, or used to help cover the rising cost of living that is eating away at families’ household budgets,” Wastell said. “With NAB predicting a 4.35% cash rate peak, now could be the time to lock in a lower rate before repayments rise again.”

Melbourne mortgagees could save almost $6,000 a year by switching

Mozo analysis has found that while Sydney led the charge in potential savings, Melbourne was not far behind. In Melbourne, owner occupiers paying principal and interest have the opportunity to save an extra $498/month, or $5,981/ year, based on the median house value of $766,912.

Even in Darwin, where the median house value is much lower at $488,363, owner occupiers paying principal and interest could save up to $317/month or $3,808/year based on Mozo’s calculations.

Sydney Property Investors could save an extra $9,440 a year

It’s not just homeowners that could benefit though, as investors paying principal and interest in Sydney could save a whopping $786/month, or $9,440/year.

On average, across the eight Aussie capital cities, switching from the average variable rate of 6.96% on an investment loan paying principal and interest, to the lowest rate in the Mozo database of 5.79%, could save savvy investors $530/month or $6,366/year.

“For property investors currently feeling the pinch of 12 rate hikes in almost as many months, now could be the time to compare investment loan rates,” Wastell said. “With house prices increasing by 5.3 per cent in the June quarter it's crucial that investors keep an eye on rates to see if they can get a better deal.”