Compare the Market urges homeowners to negotiate rate cuts or switch to cheaper rates to save.
The recommendation came despite the RBA’s decision to hold rates at 3.85% in a split decision between the RBA board.
Compare the Market's economic director, David Koch said that while the RBA announcement may be disappointing, there is still hope for borrowers who are willing to negotiate or switch to a better rate.
“There can be a 0.50% difference between some of the advertised rates on Compare the Market’s home loans panel so you can effectively create your own rate cut by shopping around,” Koch said.
“That could represent a saving of $210 on monthly repayments – or $2,520 over a year – for someone with an average $660,000 loan.
“And that’s just looking at rates for new customers, which we know are often much more enticing than the rates available to older customers who have not refinanced in a number of years.”
A survey of homeowners by Compare the Market found that around 65% of respondents who had mortgages for +3 years had not refinanced for more than three years.
While more rate cuts are forecast for the rest of the year, Koch advised that it’s a good idea to compare options now.
He said homeowners can’t always rely on the RBA to deliver mortgage relief and that it's up to them to stay vigilant.
“Homeowners who have been with the same lender for a number of years need to make sure they are at a rate that is commensurate with what new customers are getting,” he said.
“Compare what other lenders are advertising to see what else is out there. If your lender won’t match the market leading rates, it might be time to switch.
“Also look out for cashback offers for refinancers, which can be worth thousands of dollars. When so many families are stretched to the max covering everyday essentials, we can’t afford to waste money on our mortgages. It only takes a few minutes to run a quick comparison and look for a better rate.”
