Are you paying too much interest on your mortgage?
Do you feel like you're paying too much on your mortgage? Interest rates might be at an all-time low due to the cash rate cut earlier this year, but who wants to pay more than they need to on their home loan? And we're not talking about making larger or extra repayments here – we're talking about Australians having a higher interest rate than they need to.
Research from financial software company Pocketbooks has revealed that about 90 per cent of Australians don't know what their current interest rate is. That's shocking enough, but the research goes on to show that we are, on average, paying 1.75 per cent more than the lowest available rate. That's a lot of extra cash you could have in your pocket every month!
The importance of a mortgage health check
There are a few reasons why people pay more on their interest than the lowest possible repayments. Additional features, flexible lending, lines of credit – for some people, it is often worth paying this extra capital to access these kinds of products. But for many others, the additional costs could be getting in the way of securing their retirement early.
"If you look at the market before the latest RBA rate changes, the most competitively priced home loans on offer are at or below 4 per cent interest and the best big four bank rates are about 4.4 per cent," explained Pocketbooks Chief Operating Officer Bosco Tan.
Home loan opportunities
Affordability has now improved to levels not seen since 2013.
We are currently living in one of the most impressive years for home loan affordability. House prices might be going up, but the Real Estate Institute of Australia and Adelaide Bank have revealed that, due to historically low interest rates, affordability has now improved to levels not seen since 2013. Despite this, you can't become complacent in making sure you are getting a great deal!
This is one of the reasons why it's so important that you speak to a qualified mortgage broker. The professionals at Eclipse can ensure that you are getting a suitable home loan at a great rate, making it that much easier to only pay as much as you need to. Reducing or eliminating your debt is so important to improving your current and future lifestyle, so don't delay on that mortgage health check! Get in touch with one of our home loan experts today.