Borrowers are breathing a sigh of relief after the Reserve Bank decided to hold interest rates yesterday. But, with further rate rises still a possibility, now could be a good time to nab a lower rate.
Canstar found borrowers could save an extra $488 a month by switching from the average variable home loan rate to the lowest on its database - with a 1.54 per cent difference between the two.
“Refinancing can provide relief for close to half of the Reserve Bank increases to date, an opportunity that is too good to ignore,” Canstar finance expert Steve Mickenbecker said.
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“Canstar’s website displays 209 variable loans and 82 fixed-rate loans below 5.5 per cent so there is plenty of opportunity to save.”
Nearly $20 billion in property loans were refinanced in February, up 23 per cent on the same time last year. But many Aussies still hadn’t made the switch.
“The recent record levels of refinancing are still only around 1 per cent of total outstanding housing loans in Australia each month. The overwhelming majority who have not refinanced are just paying too much,” Mickenbecker said.
Top home loan rates
According to Canstar, the lowest variable rate is currently 4.94 per cent - from Homestar Finance and The Mutual Bank. This is followed by 4.95 per cent from Community First Bank.
Top savings rates
Savers are also being urged to shop around, with many accounts failing to pass on the RBA’s full 3.50 per cent rate increases.
“Bonus account holders have done best with an average increase of 3.28 per cent, provided they meet the bonus conditions each month. However, promotional account savers have received only 1.71 per cent unless they open an account with a new bank every three to six months,” Mickenbecker.
With savings account interest rates now at 5 per cent, it can pay for savers to shop around. But Mickenbecker said savers would need to meet bonus and promotional conditions to get the top rate.