While most Australians could save thousands of dollars by refinancing their mortgage, more than 50 per cent couldn’t be bothered.
According to a new survey by Loan Market Group, 58 per cent of Australians said they would need to save $1,500 or more a year to be motivated to refinance to another lender.
Loan Market chief operating officer Dean Rushton said there was as much as 1.2 per cent difference between the variable home mortgage rates currently on offer.
He said the latest quarter percentage point rise in official interest rates by the Reserve Bank of Australia (RBA) and the Commonwealth Bank raising its standard variable rate by 0.45 per cent had highlighted the benefits of shopping around and the need for more competition in the home finance sector.
“Lenders and brokers needed to communicate more effectively about the potential savings from moving mortgages and demystify the process,” Mr Rushton said.
“The differences between lenders and the interest rates and conditions they offer have never been wider.
“Major lenders are offering variable rates as high as 7.7 per cent but there are rates as low as 6.5 per cent. On an average $300,000 mortgage, you could save around $3,500 per annum if you could have a variable rate that was 1.2 per cent lower.”
Mr Rushton said the online poll of 380 people found 42 per cent of those surveyed needed to see potential savings of more than $2,000 a year before considering switching loans.