Earlier this month, the Reserve Bank of Australia reduced its official cash rate (OCR) to a record low 1.25 per cent. Many of the major banks have already announced changes to their home loan rates, and home loan experts are urging Australian borrowers to find out if they are eligible for a rate cut. There’s never been a better time to review your mortgage by contacting your Mortgage Express broker.
Shopping around for bigger savings
This month’s interest rate cut is tipped to be the start of a rate-cutting cycle that could drop the OCR right down to 0.5 per cent within a year, say experts. While a rate cut is an obvious concern for retirees and savers who rely on interest income, it’s something of a bonus for borrowers.
Depending on the amount of your mortgage, you could soon be saving hundreds of dollars a year if your lender passes on the interest rate cut. Potentially, with a $400,000 mortgage, a 0.25 per cent rate cut could save you $700 a year on a principal and interest loan over a 30-year term.
Consumer advocates are urging Australians to review their mortgages and to find out if they’re eligible for a rate cut.
"It does pay to examine your particular situation and not rely on these media releases and media reporting about what the big banks are doing," said Consumer Action Law Centre CEO Gerard Brody.
"A study by the Australian Competition and Consumer Commission (ACCC) last year found there is opaque discretionary pricing in the mortgage market and that most people are not on the relevant headline interest rates that the banks advertise," Brody said.
Get in touch with your Mortgage Express broker to book a review of your existing mortgage or to discuss refinancing to a better rate. It’s vital that borrowers don’t simply assume that rate cuts will apply to their mortgage.
Getting a better rate
When it comes to home loans, finding the biggest savings means shopping around for the lowest rate and negotiating with lenders to cut interest rate costs. A Mortgage Express broker can do all of this for you on your behalf.
Here are some helpful tips to getting a better rate:
1. Ask your Mortgage Express Broker to do research for you, comparing rates across various lenders – then you will know what rates are out there and what the competition is offering.
2. Compare the cost of refinancing against potential savings with a lower interest rate and be prepared to refinance if your existing lender won’t budge on rates.
3. Of course, get professional help from a mortgage broker – our team are skilled at negotiating on your behalf. What’s more, with access to a panel of both bank and non-bank lenders, we can compare lending options and help you make an informed decision.
If you’d like to find out more about a mortgage review with a view to securing a better interest rate, contact one of our brokers today. Simply complete this form and one of our brokers will be in touch to discuss further.
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