It’s Time For Australians To Shop Around For Home Loans

Post by Sharat on December 7, 2018 · Under loans · Comments Off on It’s Time For Australians To Shop Around For Home Loans 

According to research, Australian borrowers who continue to stick with the big four lenders despite the hike in interest rates could end up missing out on saving more than $2,000 a year. When this figure is combined Australians could end up missing out on saving a whopping $7 billion in annual interest payments or $19 million a day. Over the last few months ANZ, CBA, and Westpac have all raised their variable home loan rates in response to rising funding costs.

Loyalty is not a good reason not to shop around

Someone who holds a mortgage with the big four banks is now paying as much as 143 basis points over the lowest possible rate in the market. What that means in practice is borrowers end up paying as much as $250 more a month in interest payments compared to those who have borrowed at the lowest home loan rate. The main reasons behind Australians sticking to their lender and not switching is loyalty and apathy.

All you need to do is look

Eight out of ten Australians say they bank with a big four lender, however the propensity to not switch banks costs Australians a huge amount of money, especially when it comes to mortgages. If a bank has increased its interest rates, loyalty must be cast aside and it is time to start shopping around. Making the switch to the best deal could save thousands of dollars a year. The good news is borrowers from the big banks are not required to take higher interest rates in their stride, there are many lenders with competitive rates and all a borrower needs to do is simply be prepared to look.

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