Dollar Saver Tip #7
If you can negotiate just a 0.50% decrease in your home loan rate, you could save more than $2,000 a year.
According to RBA figures, the average Australian with a home loan is currently paying an interest rate of 4.88%. That's more than new borrowers are paying – the average rate of a new home loan taken out in September was 4.38%.
This is shocking, considering the cash rate is higher now than it has been for some years, so in theory, the new home loan rate should be higher than what Australians are already paying.
Did you know?
Australian Bureau of Statistics (ABS) figures confirm the average home loan taken out in September 2022 was $589,063.
Assuming the average home loan value for September and the average home loan rate of 4.38%, the average borrower is paying $2,943 every month.
If you have a home loan, you might be paying closer to that 4.88% rate. Now, 0.50% difference might not seem like much. But assuming the same home loan value, that increases your monthly repayments to $3,120.
That's $177 every month. Or, $2,124 a year. How can you start saving?
See what interest rate your current lender is offering to new customers and see whether it's less than what you pay. Call them and ask them to move you on to that rate.
Compare that interest rate with other lenders and if you can get a better deal, consider refinancing elsewhere.