Yahoo Finance RBA rate pause: Aussies urged to act now to save $12,425
Many Aussies are yet to feel the full effect of the RBA’s previous 12 interest rate hikes.
The Reserve Bank of Australia (RBA) kept the official cash rate on hold at 4.1 per cent this month, but there may still be more pain to come.
Aussie mortgage holders are being urged to use this pause to get themselves a better deal on their home loan and potentially save themselves thousands.
Many households will already be feeling the squeeze of the RBA’s previous 12 cash rate hikes, however, the majority of borrowers won’t have felt the full effect of June’s increase, with hikes typically taking two to three months to hit people’s bank accounts.
Also read: RBA holds interest rates giving Aussies much-needed relief
Also read: Avoid mortgage prison: My 4-step guide to securing a new loan
RateCity research director Sally Tindall said it was impossible to say whether this was the end of the hikes, but encouraged borrowers to plan for at least one, if not two, more this year.
“The cash rate might be on hold, however, borrowers should do anything but sit tight. This second pause is a fantastic chance for borrowers to measure up their home loan rate against the pack,” Tindall said.
“Your bank might tell you you’re on a sharp rate but that doesn’t necessarily make it a fact.”
Save up to $12,425
RateCity found the average homeowner who hadn’t chased down a better deal had an interest rate of 6.86 per cent. However, it found there were still five lenders offering ultra-competitive rates under 5.50 per cent.
If someone with a $500,000 loan with 25 years remaining refinanced from the average rate to the lowest rate, RateCity found they could save $419 per month or $12,425 over the next two years.
Mortgage holders could also try haggling with their current lender for a better rate. By haggling down to 6.20 per cent - the average rate offered by the Big Four for new customers - the average mortgage holder could save $206 per month or $9,934 over the next two years.
Lowest variable rates
Lender | Advertised variable rate |
Fire Services Credit Union | 5.39% |
Mortgage House | 5.39% |
Arab Bank | 5.45% |
G&C Mutual | 5.49% |
First Option Credit Union | 5.49% |
Source: RateCity.com.au Note: Fire Services Credit Union loan limited to emergency services professionals and their families in South Australia only. LVR Requirements apply.
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