You could be paying a very high price for staying put
A small saving on your loan rate can put big dollars back in your pocket over the long term. Photo: Getty
Don’t miss out on some of the lowest rates seen in years – take a look at how much you could save by refinancing.
A recent study by comparison site Finder found the nation’s home owners could collectively be wasting as much as $27.4 million each month, or about $328.2 million annually, simply by sticking with an overpriced home loan.
These figures are based on refinancing the national average home loan of $379,400 charging the current average variable rate of 5.20 per cent to a new loan costing 5.1 per cent.
For an individual home owner, the interest savings in the above scenario can add up to around $8415 over the life of a 30-year loan. It goes to show how a small saving on your loan rate can put big dollars back in your pocket over the long term.
One in four are concerned about the paperwork
With these sorts of savings up for grabs, it begs the question: Why don’t more home owners refinance to enjoy a better deal?
According to Finder, almost one in four (24 per cent) people are put off by the amount of time taken to complete the necessary paperwork. One in 10 think it’s too hard to compare home loan products, and 13 per cent are concerned about the cost of switching to a new loan.
Refinancing is surprisingly straightforward
The thing is, none of these perceived barriers really stack up.
The banning of exit fees on variable home loans in 2012 has made refinancing affordable (though mortgage discharge and other fees may still apply).
Refinancing can be especially budget-friendly with a lender like ME, which charges no home loan application fee (solicitor, valuation and agent fees may apply). And with the support of an ME mobile banking manager, the paperwork becomes a breeze.
As for the 24 per cent of home owners who haven’t switched because they couldn’t find the time to fill out the paperwork, it’s a fair bet the potential to save over $8000 makes it worth the time and effort to make the move to a new home loan.
Keep it simple
With so many loans to choose from, ME likes to keep things simple by offering just two home loan options – our Basic Home Loan and our Flexible Home Loan. So it’s easy to see if you could benefit by refinancing. Or check out our Loan Comparison Calculator for an apples-for-apples view of how much different loans will cost you.
Easier still, speak with an ME mobile banking manager. We can crunch the numbers on your behalf to let you see how much you could save by refinancing.
Terms, conditions, fees and charges apply. Applications are subject to credit approval.
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