How to save money on your home loan: Aussies pay an average of 6.5 per cent more than cheapest rate
Simple trick that allows Aussies to save $570 a month as the cost of living rises
- Mortgage holders pay more than the cheapest loan interest
- Shopping for a better deal can save $570 per month
- The RBA has raised the official cash rate by 3.5 percent
- Advertised salaries rose 4.5 percent
Rapid rises in interest rates have led to a refinancing boom, but many borrowers are still paying the price for their complacency.
Nearly a quarter of all borrowers pay 6.5 percent or more on their variable-rate loans, based on Canstar modeling, which is 1.81 percent higher than the cheapest loan rate.
For these mortgage holders, not looking for a better deal will add $570 or more each month to a standard $500,000 loan over 30 years.
Canstar’s financial expert Steve Mickenbecker said there were 57 variable rate loans available with rates of less than five percent.
“And while refinancing to the lowest interest rate loan on the market is not always possible, there is still a wide range of loans that offer great savings,” said Mr. Mickenbecker.
New data shows that nearly a quarter of all borrowers pay 6.5 percent or more on their variable-rate loans, 1.81 percent higher than the cheapest loan rate (photo: Australia’s four largest banks)
Since May last year, the Reserve Bank has raised its official cash rate by 3.5 percentage points from its record low of 0.1 percent, boosting monthly repayments for mortgage holders.
New data on advertised salaries should reassure the RBA that wages are unlikely to spiral out of control and that inflation remains under excessive pressure, calling for a pause rather than later.
SEEK’s advertised salary index revealed stagnant growth in pay packages offered to new hires in February.
The index, which measures the change in advertised salaries on the platform’s job postings over time, recorded a 0.3 percent increase over the month and 0.8 percent growth in the quarter.
On an annual basis, advertised salaries in the job market rose by 4.5 percent.
SEEK senior economist Matt Cowgill said average advertised salary growth was leveling off.
“The fact that advertised salary growth is not accelerating will reassure policymakers that we are not in a wage-price spiral,” he added.
But with advertised salaries well below inflation, Mr Cowgill said workers would struggle to make ends meet.
Despite cost-of-living pressures, online retail sales growth accelerated in February.
NAB’s monthly index posted 1.3 percent growth in February, following a 0.6 percent increase in January.
NAB chief economist Alan Oster said the return to monthly growth in online sales has not matched broader sales data, which began tracking sideways.
Shopping around for a better home loan can save mortgage holders $570 or more per month on a standard $500,000 loan over 30 years (pictured, a home for sale in Sydney)
On a year-over-year basis, he said there was a milder contraction in February, a trend he expects to continue as Covid-19’s increased online spending patterns stop skewing year-over-year results.
He said the largest category, home goods and appliances, continued to shrink year-over-year, and the share of categories such as take-out food, games and toys and media grew as part of the index.
“However, recent results in year-on-year change for takeaway and media appear to be slowing from elevated levels,” said Mr Oster.
“Given the latest performance for these categories and the pressure being put on discretionary categories, we will continue to monitor to see if these trends continue.”