At today’s board meeting, the Reserve Bank of Australia left the cash rate unchanged at 1.5 per cent. The banks, however, are another matter.
The RBA cash rate has been relatively steady at an historical low for quite some time now. But if you have a mortgage, chances are your lender has increased your interest rate despite the steadiness of the cash rate.
So, what’s all that about?
Furthermore, astute mortgage holders would know that most lenders are very quick to move interest rates in line with the RBA’s numbers when they move in an upward direction, but measurably slower (by around a month, on average) when the movement is downwards.
So, what can you do as a lender?
The simple answer is to pay attention! Some 90 per cent of Australian homeowners don’t know their current interest rate.
As a result, homeowners will pay an average of 1.75% more interest on their home loan than the lowest rate available. That equates to $5,000 per year for an average home loan of about $435,000 (NSW).
It’s worth noting here that the best loan isn’t necessarily the one with the lowest rate. Nor is the lowest interest rate is not always the best interest rate. But 90 per cent of people not knowing their current rate? It begs the question…
When was your last finance review?
If it hasn’t been in the last 18 months, then it is pretty easy to suggest that there may be additional savings we could be finding for you. The CASH RATE has dropped 100 basis points (1%) in the last 2 years.
How confident are you that your lender passed all of these savings on to you?
Call us today!