Borrowers are today celebrating Australia's first official interest rate cut in almost three years, and experts are predicting more to follow. But why wait to see if your bank or lender passes on the RBA rate cut in full? You can give yourself several rate cuts today.
Vadim Taube, Chief Executive Officer of InfoChoice.com.au, says home owners could save literally tens of thousands of dollars by taking a quick home loan health check and now is the perfect time to act.
"Today's RBA rate cut combined with the potential relaxation of the mortgage buffer rules means this is the ideal time to be looking at the market and comparing your home loan to the very best deals available out there,'' says Vadim.
"Right now lenders are fighting each other for your business, and there is so much money to be saved by ensuring that you are in the right product for your situation.''
Four rate cuts at once
While today's rate cut is welcome news, the typical Aussie with a home loan could save themselves far more simply by comparing their existing mortgage to the over 800 different home loan products currently available on the InfoChoice website.
"It's great that the RBA has cut rates by 0.25 per cent," says Vadim. "But even if the banks pass on the cut in full to retail borrowers, the monthly reduction in repayments will be around $40 per month on an average $300,000 mortgage.
"Many borrowers are now paying 4.5 per cent plus on their home loan."
"By refinancing to a loan around 3.5 per cent a borrower would be give themselves the equivalent of four RBA rate cuts of 0.25 percentage points each."
Whether you've had your home loan for one year or 10, it's vital you perform regular health checks on it.
Becoming complacent and just letting the repayments come out of your account each month is a trap that's easy to fall into, and lenders love customers who don't review their loans and finances and simply accept the deal they are given.
There are always new home loan products and features being released, and regular special offers from banks and other lenders.
Refinancing means using a new loan to pay out and replace an existing loan with a sweeter deal. Refinancing is also often used by borrowers to consolidate their other debts, like large credit card and personal loan balances, into a new mortgage and pay them all off with one payment and one low interest rate.
Most home loan products on offer from Australian lenders are available for refinancers, and lenders generally favour refinancing customers.
Calculate the savings
Our calculators make it easy to work out how much you could save by refinancing your home loan. Or if you wish to keep making the same monthly repayments, how much sooner you could have your home loan paid off by reducing your interest rate.
Use our comparison tables to quickly and easily review the rates, features and fees of various home loans from our participating providers.
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.