Rate gap highlights a need for regular loan reviews as results on Finder, a comparison website, shows a gap between the average variable interest rate and lowest variable rate of 1.57 percentage points in early March, while the gap between the average and lowest fixed rate was 1.37 percentage points.
It is very important to note that interest rate comparisons are not always equal, and some loans may be more suitable for certain borrowers depending on their eligibility criteria and extra loan features, such as an offset account or redraw facility.
Nevertheless, the data does highlight the importance of reviewing your home loan every two or three years, because lenders that may have offered very competitive interest rates in the past may have since fallen behind other lenders.
To show you the considerable savings that may be available through refinancing, let’s consider some basic calculations: if a borrower had 25 years left on their mortgage and switched from a loan with a 6.50% p.a. interest rate to one with a 6.00% p.a. rate, here’s how much they could potentially save over the life of the loan:
- $46,359* if they had $500,000 left on their mortgage
- $69,538* if they had $750,000 left on their mortgage
- $92,717* if they had $1,000,000 left on their mortgage
I can help you explore the market to find more competitive loan options and discuss other strategies that could potentially save you money. Contact Us today to learn more about how we can help you secure the best deal.