Australian borrowers could be missing out on potential refinance opportunities due to failing to review existing home loans.
According to Aussie Home Loans’ survey, 60% of borrowers think they don’t get the best deal. However, the same percentage said that they haven’t reviewed their home loans in the past year or since they took out the loan.
One in five homeowners in Australia with mortgages have refinanced their loan in the last 12 months.
Lendi Group, Aussie Home Loans’ parent company, has shown that refinancing could result in savings up to $2,000.
Refinances are possible if borrowers opt for a lower interest rate by 80 basis points than the current one.
Lendi Group CEO David Hyman stated that Australians are not fully aware of the benefits of refinancing, and they have difficulty deciding how to act in favorable lending conditions.
“With three quarters of Australia already secured, we know that refinancing is not a top priority right now. But, Australian mortgage holders who don’t examine their home loans can be missing thousands of dollars that could prove to be very beneficial for many families,” Mr Hyman said.
There are many reasons that borrowers might be reluctant to refinance. They may not know where to start, fear they won’t get a better deal or end up paying more.
These results align with Westpac’s recent findings that revealed that 25% Australians are uncertain about their future mortgage rates.
Raj Ladher is your Mortgage Broker home loan specialist. He stated that another reason borrowers might not want to refinance might be their loyalty toward their banks.
Mr Ladher said that it was crucial for borrowers to not take out home loans. He advised them to consult a professional in order to get the best deal.
Borrowers need to get their home loan statements. To view their interest rates, they can log into their online banking. A mortgage professional will assist them throughout the process and, most importantly, they’ll let them know how much they can save by refinancing.
“I constantly save my clients thousands of dollars in interest keeping the banks accountable and sometimes we don’t even have to move to another bank.”
The Australian Bureau of Statistics estimates that there are 6,000,000 outstanding mortgages in Australia. But, less than 450,000 of these have been refinanced in the previous financial year.
“While this can partly be explained by a knowledge gap when it comes to refinancing and what’s involved, bridging this gap with the help of an expert is not hard,” Mr Hyman said.
“It’s good to remember that reviewing your loan doesn’t always mean refinancing, and you may not even need to change lenders to get a better rate.”