Despite rising interest rates, borrowers can still save tens of thousands of dollars on their mortgages by shopping around.
Analysis by RateCity shows many borrowers are paying thousands of dollars a year too much because they don’t ask their existing lender for a lower rate.
Director of research Sally Tindall says many borrowers just accept the first offer or accept a discount without checking the real amount they will be charged.
“Banks are falling over themselves to offer refinancers all matter of perks, including rate discounts, fee waivers and cold hard cash to tempt people into switching,” she says.
She says on a $1 million owner-occupier mortgage on a variable rate of 5.86% homeowners should be able to reduce their interest bill by between $24,500 and $40,000 over the next three years.
Experts encourage mortgage holders to:
- Ask for a better rate
- Get the shortest term possible
- Use comparison sites
- Assess your offset costs
- Work out what you can afford to borrow
- Compare loan features
- Pay down existing debt
- Save as big a deposit as you can
- Understand your debt-to-income ratio
- Consider alternative loan types or terms