March 06, 2012
Regardless of the Reserve Bank of Australia's decision today to hold rates steady, borrowers should stay vigilant about their home loan choices by investigating all their loan and lender options, according to Australia's largest independently-operated mortgage broker, Mortgage Choice.
The cash rate remains at 4.25%, suggesting the economy is moving to steadier ground. However, a steady cash rate does not mean lenders' home loan interest rates will stay on hold.
Company spokesperson Belinda Williamson said, "Today's decision by the Reserve Bank to keep the cash rate on hold is likely to foster a greater sense of confidence in the domestic economy. However, if last month's interest rate movements are anything to go by, the idea of steady rates may be short-lived."
"In this changing home loan environment, the 'new normal' could be that lenders shift their home loan interest rates at any time, in any direction, and by any amount.
"Buyers and borrowers should prepare for future rate movements or unexpected changes to their financial situation by factoring in a repayment buffer of at least one to two percentage points.
"Existing borrowers who are dissatisfied with the direction their home loan's interest rate is taking can easily shop around. They can swiftly take charge of their home loan situation by comparing their loan with others, actively seeking out a product that better suits their needs and has a more attractive interest rate, fewer fees, and/or offers loan features that can help borrowers make a larger dent in their debt.
"The potential savings can be significant. An analysis of our recent loan data shows we have saved our refinancing customers on average $10,000 each over five years*.
"Buyers-to-be may also stand to save by casting a wider net in their search for a well-suited home loan.
"When considering your loan options, keep in mind a professional mortgage broker has knowledge of the latest interest rates, new products and special discounts. They also provide borrowers with the choice of hundreds of loan products from a wide range of lenders, including the big banks, smaller banks, building societies and credit unions. It may be that a better deal exists with a smaller or lesser known lender."
For home loan tips, trends, facts, data and other information, visit Facebook.com/MortgageChoice or Twitter.com/MortgageChoice. Or, call 13 MORTGAGE.
*Average savings from 368 customers who decided to refinance from Aug 2011 - Jan 2012.
For further information or to arrange an interview, please contact:
Mortgage Choice Corporate Affairs
(02) 8907 0472 / 0407 416 124