But recent research shows that many Aussies could be saving much more if they shopped around for a cheaper home loan.
A survey from Money.com.au found that 45 per cent of homeowners were undecided about refinancing this year while a further 25 per cent were holding off for further rate cuts, reports realestate.com.au.
“Lenders often provide better rates to new customers, leaving existing ones on higher rates,” mortgage expert Debbie Hays told realestate.com.au.
“If you haven’t refinanced recently, you might be paying a loyalty tax.
“The best variable rates are now in the mid-5s. If your rate is above that, you’re not on a competitive deal, or worse, you’re on a dud rate.”
Refinancing to a lower rate now, rather than later, could mean you gain a hip pocket mortgage reduction now, while still enjoying the benefits of any future Reserve Bank rate cuts.
That assumes that your new lender passes on future cuts.
Most banks, including the big banks, have passed on rate cuts this year and may well continue to do so in the current economic and political climate. However banks are not under any legal obligation to pass on Reserve Bank rate cuts.
As realestate.com.au reported in May, there were still a number of banks who, at the time, had not passed on the rate cut, though this represented a minority of lenders.
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