Six in 10 Australian borrowers doubt their home loan constitutes a good deal, while more than half agree it’s the right time to refinance.
Yet less than 40 per cent of mortgagees have reviewed their loan in the past year, according to a poll commissioned by heavyweight broker, Aussie.
In other words, they’re potentially missing out.
A further 28 per cent of the 1003 customers surveyed online in July were unable to quote the amount of interest they were paying on their loans, despite rates being at historical lows.
Aussie says the research demonstrates a “huge disconnect between mortgage holders’ understanding of the opportunity offered by refinancing and their willingness to take action at a time of favourable lending”.
Some 62 per cent of respondents said they understood the importance of refinancing on a regular basis, while 61 per cent indicated they were not confident they currently had a good deal.
Even so, only 20 per cent have refinanced in the past 12 months.
Internal data from Lendi Group, Aussie’s parent company, shows typical refinancers could save about $2000 annually by dropping 81.00 basis points, or 0.80 per cent, on their interest rate.
Australian Bureau of Statistics numbers show there were approximately six million outstanding mortgages nationwide in June, less than 450,000 of them refinanced in the past financial year.
That gap is “staggering”, according to Lendi Group CEO David Hyman.
“With three quarters of Australia in lockdown, we understand that refinancing may not be top of mind,” he said.
“But by not setting aside a small amount of time to look at their home loan, Australian mortgage holders could be missing out on thousands in savings, which could be really helpful for many families.”
The idea 54 per cent of Australians had never refinanced their loan could be partly explained by a knowledge gap around what’s involved, Mr Hyman said.
However bridging it with the help of an expert wasn’t hard.
“It’s good to remember reviewing your loan doesn’t always mean refinancing and you may not even need to change lenders to get a better rate,” he said.
The survey revealed some Australians believe it’s too hard to refinance or are unsure how to begin (22 per cent).
Others are convinced they won’t get a better deal (18 per cent) or will end up worse off (24 per cent).
AAP
