It was the year of the “big switch”. In the 10 months to November 2021, $150 billion worth of home loans were refinanced – about $10 billion more than for the whole of 2020. If you’ve had the same loan for a few years, now could be the time to move to a new lender – and it can be easier than you think.
“We’ve seen refinancing snowball through Covid,” says Scott Adams, a Sydney-based senior mortgage broker with Aussie Home Loans. “It’s been driven by a big uptick in property values, a dramatic fall in fixed rates and the availability of refinancing rebates – also known as cashback deals – which have been worth $2000 to $4000.”
He says most homeowners are refinancing to make the most of their equity. “Refinancing purely for a dollar-for-dollar swap to get a better rate is not unusual,” he says. “But more commonly, people have an additional goal in refinancing, such as opportunities to consolidate debt or release home equity to buy a new car or investment property.”
New customers favoured
It’s no secret that lenders save their best deals for new customers. “Banks rely on customers who don‘t switch – the ‘complacent’ borrower. These customers are paying a higher rate than new customers,” says Jack Talbot, director of broking firm Leverage Capital.
Reserve Bank data shows the average variable rate on existing loans is 3%. For new loans the average is 2.63%. The 0.37% difference can see refinancers save close to $100 each month on a $500,000 loan, and shave almost $29,000 off the total interest cost over 25 years.
Diese Geschichte stammt aus der February 2022-Ausgabe von Money Magazine Australia.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der February 2022-Ausgabe von Money Magazine Australia.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.
