The low home loan interest rates in Australia are a boon for homebuyers who can find home loan deals starting as low as 3.39 percent per annum, saving thousands of dollars over the life of the loan.
Yet, many homeowners are hesitant to switch lenders, throwing away their hard-earned money at the banks when they could have used it for important purchases in their own life!
Nat and Ashley who own a home in Melbourne, refinanced their mortgage recently, saving thousands of dollars in the process. “There was some paperwork involved, but the reduction of 0.4 percent in our interest rate was well worth the effort,” says Nat. “We bought our house in 2014 and forgot all about our mortgage rate until one of our friends refinanced their home loan with HashChing and informed us about the low rate they scored on their mortgage. We visited the website out of curiosity only to realise how much our carelessness was costing us,” he adds.
Did you know that a reduction of 0.2 percent on a $500,000 home loan with an initial rate of 4.00 percent per annum could save you more than $20,000 over a term of 30 years?
It pays to be disloyal!
Sheer laziness or a misplaced sense of loyalty to your bank can cost you dearly!
According to experts, home buyers must review their home loan every year or so to ensure they are on the best possible deal in the market.
Yet, many homeowners are squandering away their money due to their reluctance to refinance. A CoreData survey of 1,500 mortgage holders reveals that “about one in two homeowners suspect they’re not getting a good deal on their home loan but won’t switch because of laziness, loyalty to their lender or the fear of someone looking at their finances.” Most surprisingly, one in seven mortgage holders who participated in the survey said they would never change their lender no matter how good a deal was on offer! Unfortunately, banks don’t seem to reward this kind of loyal behaviour. The same report points out that non-switchers are “penalized for their apathy – with higher rates of 13 basis points more, on average.”
According to Susan, a mortgage broker, many mortgage holders happen to be too lazy to shop around. Besides, many of those who shop around only look at deals from three lenders or fewer, which reduces their chances of landing a competitive rate significantly. Fear of rejection is another factor that keeps mortgage holders away from refinancing.
“It could be daunting to have someone look at your finances and judge you for your spending habits,” she explains. Indeed, half of the non-switchers in the abovementioned survey said that the thought of having their finances reviewed by a third party puts them off. Fortunately, online mortgage platforms such as HashChing make it possible for people to compare home loans and start the application process online, without the fear of being judged by a bank or even a broker!
On the HashChing website, you can find competitive home loan deals from over 60 lenders in just a few seconds. All you need to do is head to the home loan deals section on the website, answer a few basic questions such as the size and the type of loan you are looking for and choose the home loan deal that is best suited for you. All the rates displayed on the website are broker pre-negotiated and could be as much as one percent lower than lender advertised rates displayed elsewhere. If you are still looking for excuses to not switch lenders, read how Simon went from paying $800 a week to $490 a week with HashChing.
HashChing is an online mortgage marketplace that enables Australian homebuyers to compare broker pre-negotiated home loan rates online. Aspiring home borrowers can get in touch with our verified broker partners online to have their queries answered by experts in a transparent manner, free of cost. Browse our broker database.
By Vidhu Bajaj,
HashChing Content Writer