The RBA left the cash rate on hold, but that doesn’t mean homeowners should accept their current mortgage interest rate.
New research from comparison website RateCity.com.au shows that some of the lowest rates on the market are reserved for mortgage holders who have plenty of equity in their property. One lender, for example, is currently offering a rock-bottom rate of 3.44%. The catch is that the householder must own at least 70% of the property, according to Rate City.
RateCity Money Editor Sally Tindall said, “Borrowers who have benefited from the property boom are in the drivers’ seat,” she said. “If you own more than 20% of your property, you’re holding a powerful bargaining chip,” she said.
The message is clear to homeowners says Angus Raine, Executive Chairman of Raine & Horne. “Talk to a finance specialist such as Our Broker about what mortgages will suit those owners with plenty of equity. Then go back to your lender and ask for a better rate. If your lender doesn’t budge, a broker can help put you in touch with a more suitable home loan.”
RateCity research shows an average borrower with a discounted variable mortgage $350,000 with a loan term of 30 years, with one of the big four banks could save an estimated $215 per month or $77,343 over the lifetime of their loan by switching to the lowest rate lender on the market.