What’s My Current Interest Rate? Wouldn’t Have a Clue…

interest rateAlmost one third of Australians with mortgages have no idea what interest rate they pay, according to a survey released this week by mortgage broker Aussie.

This figure is further compounded with almost the same percentage of property investors unaware of their interest rates, even as they seek to secure their financial future through property.

What’s more, almost a quarter of those who did know were paying more than they need to.

The question put to respondents was: How precisely do you know the interest rate you are paying on your mortgage? Please enter your current interest rate and type.

A surprising 32.8 per cent of homeowners and 29.5 per cent of investors were unable to even guess at their interest rate.

“This statistic is really worrying,” says Aussie Founder and Chairman John Symond.

“Even if the RBA doesn’t move interest rates, people need to be constantly questioning their rate.

“It could be just by speaking to their broker about a simple mortgage health check to see how much they could save,” Mr Symond suggested.

Of those surveyed who were able to nominate their interest rate within a quarter percentage band, an astounding 23.5 per cent of homeowners and 23.2 per cent of property investors were paying more than 7.0 per cent, which was the band that included the interest rates of the big four banks (7.01-7.09 per cent) in April, when the survey was done.

Now it is closer to an average 6.5 per cent interest when the official RBA cash rate is 3.5 per cent.  Variable loans of around 6.0 per cent or even less are not uncommon.

“Those who have had less than half a per cent rate cut on their variable rate since November or pay more than 6.5 per cent are simply out of market”, Mr Symond said.

“When you consider the savings between 7.0 per cent and 6.0 per cent on a home loan of $300,000 is around $197 per month and take that over the life of your loan, that is about six years and eight months cut from the loan term and several thousand dollars saved in repayments.

“I urge all borrowers to be more attentive to their home loan rate”, he concluded.

The survey was conducted online on 10-15 April 2012 to 1,000 Australians aged 18-64.

 

Source : Quartile Property Network (12 July 2012)

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