Research exposes big gap between average and lowest variable rates
The gap between the average variable interest rate and lowest variable rate on Finder, a comparison website, was 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 research the market for you to see if there are more competitive loans available and can also discuss other potential options that might save you money.
Let’s chat about your refinancing options
* The figures provided are for illustrative purposes only and are based on a hypothetical scenario. They assume the borrower has an owner-occupier home loan with principal-and-interest repayments and 25 years remaining on the loan term. They also assume no changes to the loan term, all monthly repayments are made on time, and no additional fees, charges or changes to repayment frequency apply. Actual savings will vary depending on your individual circumstances, loan terms, interest rate, fees and lender policies. This is not financial advice and should not be relied upon as such. Please speak to a licensed mortgage broker to understand whether refinancing is suitable for your situation.