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Excerpts from this article first appeared on news.com.au on MARCH 10, 2017, and written by Owen Roberts

 
Homeowners in the west are paying nearly double Sydney’s average interest rate, with those in The Ponds, Doonside, Quakers Hill and Campbelltown paying as much as 7.88 per cent.
 
Sydney Property Investment
 

HashChing reveals Australia’s most ‘ripped off’ suburbs

A study by HashChing revealed that homeowners in the west are paying well above Sydney’s average interest rate, with residents in the Blacktown and Hills areas the hardest hit.

A borrower-friendly mortgage marketplace, HashChing, analysed over 1,000 mortgage applications and found that home buyers in Ponds, Doonside, Quakers Hill, Campbelltown and Stanhope Gardens are paying up to 7.88 per cent interest rate on their home loans, almost twice of what an average borrower in Sydney is paying currently.

In Melbourne, home owners in Blackburn, Glen Waverley, South Morang, Mernda, Narre Warren and Cranbourne are being ripped apart by lenders at a rate of 7.04 per cent; shockingly high in comparison to the average interest rate Melbournians pay on their mortgage – 4.6 per cent.

It is the same story in Queensland, where borrowers are paying 7.39 per cent for properties in Coomera, Advancetown, Austinville, Labrador, Surfers Paradise, Brendale and Springbrook (average home loan interest rate in Queensland is 4.72 per cent).


The Reason?

Well, according to the study, higher interest rates in Blacktown and the Hills can be attributed to a large number of self-employed borrowers, whose average interest rate was found to be as much as 1 per cent higher. The finding is based on the fact that 87 per cent of the total borrowers were self-employed.

Another reason could be ignorance or a perceived sense of loyalty to large, well-known financial establishments.

“Sticking to the same home loan provider out of some misguided sense of loyalty is costing borrowers tens or even hundreds of thousands of dollars over the life of their loan,” said Mr Mandeep Sodhi, CEO, HashChing.

According to Mandeep, owners must continually be looking for a better rate. “If you don’t get what you want, leave. Equity in a house is always great ammunition for a lower rate,” he explains.

Indeed, with some quick calculations, anyone can see the truth in Mr Sodhi’s statement. Using an online calculator, you would realise that just a 1 per cent reduction in interest repayments can save approximately $87,383 over the life of a $500,000 loan with a 25-year term.


Did you check on your home loan recently?

Would you be surprised if we tell you that 83 per cent of the people we surveyed did not know what rate they were paying? But, if you want to save money, you need to review your home loan periodically, to be sure you are not paying the banks more than everyone else is!

With more than 1,000 home lending products in Australia from a score of banks and non-bank lenders, it is not surprising that lenders are working hard to retain their existing customers while attracting new ones; flooding the market with competitive home loan deals offering low interest rates and plenty of helpful features.

“Having paid 4.8 per cent on my mortgage for the first four years, I switched to a smaller mortgage broker, saving $450 a month. Contrary to my expectations, the process was quick and easy,” says a resident of one of the most ‘ripped off’ suburbs, who recently beat the banks at their own game by refinancing to a better rate. “You need to make sure you consider all your options and know that there are a number of services out there that can assist you with changing your rate,” he adds.
In fact, in today’s competitive mortgage market, it is easy to save money on your home loan. Mortgagees in the suburbs of Hoppers Crossing, Truganina and Tarneit in Melbourne, and Liverpool, Casula and Mount Pritchard in Sydney are super savvy when it comes to saving on their home loan. The highest number of borrowers from these suburbs are looking out actively to refinance their home loans through HashChing.

The good news is you no longer need to pay the price for sticking to a brand. “Smaller lenders are much more aggressive; you have the choice to stick with the big banks or get a better rate,” remarks Mandeep, pointing in the direction of the growing number of people moving away from the big four banks and the safety associated with larger financial institutions.

With expert brokers at your side and a smooth platform to compare home loans from your favourite screen, it is, indeed, time you reviewed your home loan and considered refinancing to a lower rate. You can browse broker pre-negotiated home loan deals here.
 

 

By Vidhu Bajaj,
HashChing Content Writer

 

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HashChing is helping Australians by providing access to pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

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