Borrowers benefit from ‘rates battle’: expert
Home loan customers looking for a better interest rate can benefit from the intense battle for business between the nation’s lenders, according to a mortgage aggregator.
With the Reserve Bank of Australia (RBA) keeping its cash rate at a record low, mortgage holders have access to some of the lowest home loan rates in history, Finsure managing director John Kolenda said.
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Therefore, any borrower with an interest rate above 3.0 per cent should be seeking the expert advice of a mortgage broker to help find a better deal.
“All owner-occupiers should be paying a rate in the low ‘twos’, where some consumers would be saving over 1.0 per cent on a variable loan,” according to him.
“On an average loan, this would save hundreds of dollars a month.”
While the RBA is unlikely to take its cash rate much lower, mortgage holders can still take advantage of the intense competition between lenders for their business to secure a rate reduction, Mr Koleda highlighted.
“It’s great for borrowers, it means they can save a considerable amount off their mortgage by switching from current home loans that are uncompetitive,” he said.
“If you are paying too much, ring your bank and demand a better deal. If they are not prepared to play ball, engage a mortgage broker to find you a lender with a more competitive rate.”
Mr Kolenda urged mortgage holders to be vigilant about their home loans, particularly with the economic uncertainty due to the ongoing COVID-19 pandemic.
“Don’t be complacent and just ‘set and forget’ as this can potentially cost you a lot of money. Contact a mortgage broker to make sure you are getting the best terms possible,” he concluded.