What many people are overlooking is that many of these local households have a way of reducing their home loan repayments, and you don’t have to wait for the Reserve Bank to cut official interest rates to do it.

Given that the current cash rate is at 0.25%, you might wonder how much lower they can go? But whilst some economic commentators still believe there’s scope for more cuts, there is a way that homeowners can look at cutting the cost of their mortgage that doesn’t rely on the Reserve Bank…and it’s remarkably simple.

The starting point is to take a look at the Reserve Bank website, as they publish regular updates so that we can all see what our fellow Australians are actually paying on our home loans.

The most recent data shows that at the end of June this year, the average owner occupier with a variable rate home loan was paying 3.24%. However, if you look a little closer you’ll find that the average variable interest rate being paid by NEW borrowers, (a figure that includes people refinancing an existing loan), was just 2.92%. Look even closer and you’ll find that the average charge on a new fixed rate loan of three years or less is just 2.3%! If you consider that the average home loan today is around $400,000, that equates to a saving of around $4,000 per year on what the average Aussie is currently paying!

The most important tip of all is that getting a better deal on your mortgage is really not all that complicated. You could start by giving your current lender a call and letting them know that you are considering taking your business elsewhere. If you’ve been keeping your loan up to date during the recent lockdown, they won’t want to lose your business, so you might be surprised to find out how quickly they can respond, and how flexible they might be.

An even more effective approach is to have a chat, (even if it’s online), with an experienced, independent mortgage broker to find out what your options are. Having that conversation won’t cost you a cent, and some of the deals that the lenders are offering at the moment in order to win your business could make a serious positive impact on the family budget. What have you got to lose?

Of course, if you are making plans for the future, the team at Barry Plant Moonee Valley are always happy to assist, whether you want a referral to a trusted mortgage broker, or you are simply keen to get an update on your property’s current value. Why not give us a call this week on 9319 1700 to talk about the options available.

Regards,

Bill Karp

Director – Barry Plant Real Estate

Keilor East & Essendon