Borrowers to seek better deals in 2011
Property owners looking for a better deal on their home loan are expected to dominate mortgage market activity in 2011, a national survey has found.
According to a poll conducted by Loan Market, 54 per cent of the group’s mortgage brokers expected refinancing activity to dominate in 2011.
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Loan Market chief operating officer Dean Rushton said the decision by the Reserve Bank of Australia (RBA) to buck international financial trends and lift official interest rates up to 4.75 per cent during 2010 plus moves to make it easier to switch banks was influencing home owners.
“Australians traditionally are reluctant to change lenders but events of the past 12 months have changed their outlook,” he said.
“Home owners on an average $300,000 mortgage can save up to $3,000 a year if they can be bothered switching lenders to get a better home loan deals.
“There can be as much as a percentage point difference between the variable home mortgage rates currently on offer and people are starting to realise it’s worth shopping around.”
Mr Rushton said the four RBA cash rate rises last year and the banks lifting standard variable rates by even greater margins than the central bank had highlighted the benefits to mortgage holders of looking closely at the state of their home loan.
“The events of the past year or so have put a spotlight on the benefits of shopping around, the need for more competition in the home finance sector and also the need to better communicate the potential savings from moving mortgages,” he said.