Do you know your rate?

While refinancing is on the radar for many these days, less than one in two home owners know their current home loan rate.

Article published 24 February 2021

Try this quick quiz: What interest rate are you currently paying on your home loan? If you’re not sure, you’re certainly not alone.

In a recent survey by Mortgage Choice, only 46.5% of respondents could name their loan rate. Yet, five years ago, in 2016, over 60% of people were able to pinpoint their rate1.

What’s worrying about this trend of interest rate complacency, is that it comes at a time when many Australians face increased financial pressure as a result of COVID-19. 

Six out of ten trying to save

Over 62% of Australians admit that COVID has caused them to worry more about money, with 65% trying to boost their resilience by saving more and spending less2. 

We saw this in 2020, when the nation’s ‘household savings ratio’ (how much of our income we save) skyrocketed to 19.8%, up from 6% prior to the onset of the Coronavirus pandemic3

Yet by not keeping tabs on your home loan rate, you could be letting valuable extra cash slip through your fingers.

The potential for big savings

Interest rates are at historic lows, but that doesn’t mean your loan rate is still competitive. There is a wealth of exceptional deals available right now, with interest rates that could make your loan look a little pricey. 

Let's say, for instance, that you have a variable loan rate of 3.99%. By shopping around with the help of your Mortgage Choice broker, you may be able to cut that back to 3.49% a difference of 0.5%. That may not sound like much, but on a 30-year home loan of $600,000, it could cut reduce your loan repayments by $170 each month4. That’s a lot of extra cash in your hip pocket! 

The bottom line is that while some homeowners are cutting back their lifestyle in order to tuck money away, they may be overlooking easy opportunities to save through refinancing.

Knowing if you could save with a new loan starts by understanding the rate you’re currently paying. Talk to your local Mortgage Choice broker to get to know your loan rate – and discover if refinancing can help you enjoy valuable savings.

You might also be interested in:

What’s really involved in a refinance?

It can be a smart way to help better manage your money and ensure that your loan is still suited to your current needs. But what is refinancing and how does it work? Here we lift the lid on how a refinance works and reasons to consider doing it.

5 benefits of refinancing

Thankfully, refinancing doesn’t have to be a daunting process, in fact you may find it surprisingly effortless as your Mortgage Choice broker does most of the legwork for you and provides you with the expert advice you need along the way. Check out our 5 benefits of refinancing here.

How this family saved $1000 a month by refinancing their home loan

Lex and Sarah knew rates were at an all time low, so they decided to give their local Mortgage Choice broker a call. Check out Lex & Sarah’s story in their own words.

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Posted in: Refinancing