Dollar Saver Tip #39
Save: $900 a year
Knocking just 20 basis points off your home loan interest rate could save you $900 a year.
Did you know?
Home loan interest rates soared in 2022 and continue to rise this year. Competitive mortgage rates were as low as 2% in April last year. Now it's impossible to find one below 5%.
Just because interest rates are high right now doesn't mean you can't get a better deal. And even a small discount on your rate makes a difference.
The average Australian home loan is $584,836, according to the ABS. Now let's imagine you have a 30-year home loan with an interest rate of 6.00%.
That's not the best rate on the market, but it's below the average. With a 6.00% rate your monthly repayments would be $3,507.
If you could get a home loan rate that's just 20 basis points lower, that would be 5.80%.
With this rate your monthly repayments shrink to $3,432. This saves you $75 a month, or $900 in a year.
There are 2 ways you can get a lower rate:
- Ask your current lender for a discount. It never hurts to ask. You can also check if your lender is advertising a better rate for new customers.
- Refinance to a new lender. If your lender won't play ball, compare rates online, find a better deal and switch to a new home loan.