An October survey by comparison site Finder found 34% of mortgage holders plan to refinance over the next year. With 2.9 million mortgage holders in Australia, that’s nearly 986,000 Aussies intending to get a better deal.
Finder says these home-owners could save $395 per month on average, or a total of $389 million. And that’s before the RBA potentially makes another reduction to the cash rate.
Graham Cooke, insights manager at Finder, says now is the time to switch for more than one reason. “Borrowers see record low rates and don’t want to be stuck paying more for their mortgage than they need to,” he says. “The pandemic has made people assess where every dollar they earn goes and refinancing a mortgage can lead to huge savings.”
Cooke says borrowers could save almost $5,000 a year. The savings are based on switching a $400,000 mortgage with an interest rate of 3.99% and repayments totalling $1,908 a month. If that same debt was refinanced at the lowest variable rate available on Finder (2.17%), borrowers would be paying $1,513 a month. That’s a saving of $395.