Borrowers looking to counter the recent official interest rate rises should be aware that it’s currently possible to secure home loans with variable rates more than one per cent cheaper than the standard variable rates offered by some major lenders.
With the Reserve Bank of Australia (RBA) expected to take official interest rates from their current level to around 5.0 per cent by the end of the year, home owners should be seeking the most competitive variable rate.
Did you know that a one per cent variance translates to more than $200 in monthly savings on a $350,000 loan at a 25 year term?
For larger loan sizes, borrowers also have the option of negotiating a lower variable rate with their lender.
Small lenders are providing increased competition to the major banks and this is benefitting consumers in a rising interest rate climate.
It is also worth keeping in mind that while official interest rates are expected to stay on hold for the next few months, banks could raise home mortgage rates independently of any moves by the Reserve Bank of Australia (RBA).
Problems facing European financial systems may result in higher funding costs for Australian banks, potentially leading to rate rises as some of the majors did last year.
A mortgage broker is well placed to review the circumstances of your current home loan and determine whether you can get a better deal from your lender.
Source: Loan Market – Sunshine Coast Mortgage Broker