The CEO and general manager of Domain Home Loans Kareene Koh said most Australians assume that loyalty will bring better rates, but sadly that’s not the case.
“The gap in interest rates between what a new home loan customer and an existing home loan customer pays will widen over time and starts to happen just three years after establishing your home loan,” Koh said.
“With low interest rates and a competitive environment across all of the banks, I would encourage anyone with a home loan who has not done so already to explore their options and see if there is an opportunity to save money or pay off their home faster.”
Koh said Aussies can even go to their current lender to see if there is a better rate or change lenders to take advantage of some of the low rates that are out there at the moment.
Why aren’t people refinancing their homes?
Koh said there are three main reasons that Australians do not change home loan providers:
They don't realise they are paying too much
It can be hard to compare offers because it is dependant on personal circumstances
Discharging a loan can involve a lot of paperwork and administration that can make it tough for customers
“For many customers, it is just too difficult or time consuming,” Koh said.
For Aussies struggling due to the current lockdowns Koh said now is a better time than ever to consider getting a better deal.
“For customers that are experiencing mortgage stress, there may be a number of options available to them,” she said.
“Some banks are choosing to support customers during these difficult times and if you are having trouble making your repayments, it really is important to speak to your bank and understand your options.”
Koh said for those concerned about the impact if these lockdowns continue, now is the time to work through your options and see if you can be saving.
“Often people are shocked at the savings on offer so don't assume you are getting a good deal if you have not reviewed your mortgage recently,” Koh said.