Yahoo Finance Clever mortgage move could save you $1,908 a year
Mortgage holders struggling to keep up with rising interest rates could save themselves thousands of dollars a year.
A record $14 billion worth of home loans were refinanced with a new lender in Australia in August, according to the latest data from the Australian Bureau of Statistics (ABS).
That’s an increase of 13 per cent over the month and 20 per cent over the year.
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This includes a record 27,667 mortgagors who refinanced with a new lender in August 2022 – up from 23,642 a year earlier.
Findings from PEXA Insights’ Refinancer Sentiment Research found the average amount mortgage holders saved by refinancing their loan in the 12 months to June was $1,524 a year.
However, Aussies who refinanced to a different lender were able to get a better deal, with estimated annual savings of $1,908. That’s $384 a year more than those who stayed loyal to their lender.
Finder’s head of consumer research Graham Cooke said rapidly increasing interest rates had led to a lot of pressure for borrowers.
“Borrowers are scrambling to cut costs on their mortgage where they can,” Cooke said.
“Repayment spikes are just too much to manage for millions of households, causing a rush to refinance.”
Finder’s Consumer Sentiment Tracker revealed that in the past three months, one in four (25 per cent) borrowers struggled to pay their home loan.
Cooke said many had taken on too much debt when interest rates were at a record low 0.1 per cent.
“Refinancing to a better deal can dramatically lower your costs and increase your savings,” he said.
“With at least one more rate rise predicted in the short term – the full impact of increasing rates is not expected to be felt until early next year.
“Finder’s Consumer Sentiment Tracker has seen a significant rise in the number of households who are stressed about their housing, grocery and petrol bills over the last 20 months.”
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