Do you know your current home loan interest rate? If you do, congratulations, you’re in the small minority of homeowners who can recall their mortgage rate to two decimal places. If you don’t, well don’t despair. Neither can 85% of homeowners with a mortgage. That’s what research by UBank has uncovered in its 2017 Know Your Numbers Index.
The second UBank Know Your Numbers Index was conducted amongst 1,021 Australians with a home loan. This latest index reveals a slight increase in the number of home loan customers who do not know their interest rate. Up 1% from last year’s figure of 84%.
Crunching the numbers further, 44% could only recall an approximate figure for their home loan interest rate. While 41% didn’t know their home loan interest rate at all.
Missing out on opportunity to save
These numbers indicate that many Australian homeowners are missing out on an opportunity to save money on their mortgage.
“Actively monitoring and seeking the best rate should be a priority for home owners as there are some great benefits on offer. We are seeing some of the lowest home loan rates on record, so now is the perfect time to know your numbers, and consider refinancing,” UBank CEO Lee Hatton said.
Other findings from the Know Your Numbers Index reinforce the importance of knowing your rate and to consider refinancing for a better deal.
For example, 54% admit that their financial situation is causing worry and stress, while 35% acknowledge they “have a lot of debt”.
Nearly a quarter of home borrowers (23%) think that refinancing a mortgage to save money is a good idea … but they are yet to find the right competitive rate.
If you’d like to save money on your mortgage, talk to a Westlawn Mortgage Broker. With access to a wide range of lenders, they can help you find the most competitive rates currently on offer.
Self-employed borrowers paying up to 1% more
Meanwhile, new data from online home loan aggregator HashChing suggests that self-employed mortgage holders are paying as much as 1% pa more than their salaried counterparts.
Sifting through the data, HashChing found that borrowers in several suburbs in Sydney, Melbourne and Brisbane are paying more than 7% on their mortgages, which they say can be attributed to the fact that these areas have a “large population of self-employed borrowers”.
This isn’t too surprising as banks have traditionally viewed self-employed borrowers as riskier because their income isn’t as stable and they often can’t provide the same level of information usually provided by borrowers on a regular wage or salary. This is now changing, however. Many lenders are now more willing to offer a competitive interest rate to self-employed borrowers, as we discussed earlier in Self-employed? A low rate home loan is within reach.
So, if you’re self-employed, speak to a Westlawn Mortgage Broker about securing a better deal on your home loan.
Interest rates back on the rise
While mortgage rates have been at record lows, there are indications that they may be back on the rise. Already over the past 3 months, we’ve seen some lenders raise rates on certain fixed loans, interest-only loans and investor loans.
And while there is a general consensus among most economists that the RBA is unlikely to raise the official cash rate any time soon, the banks are likely to move independently.
In Get ready for higher mortgage rates, The Australian commented on 9 February that:
“Never mind the RBA leaving rates unchanged. Mortgage rates are going up regardless of official rate settings. Moreover, they are expected to move higher again later this year.”
It went on to add that:
“Though the recent increases appear modest — typically less than one quarter of a percentage point — the crucial aspect for consumers is the switch in direction and momentum.
“Rates had been falling for more than five years before Westpac moved on November 28 last year with selected increases to fixed loans for owner occupiers and investors.”
Peter Arnold, data director at RateCity told The Australian that while owner occupiers on variable rates have so far avoided any increases, “we see raises in this area as the next move”.
Speak to us before rates rise
With interest rates for owner occupiers likely to start heading north again soon, now may be the ideal time for you to refinance your home loan for a better deal. Talk to a Westlawn Mortgage Broker today to find out how we can help you save on your mortgage.
Call us today on 1300 WESTLAWN (1300 937 852).
23 February 2017