How old is your home loan? There’s no need for a home loan calculator to figure this one out. If you’ve held your existing home loan for at least three years, you’re likely losing thousands of dollars on repayment.
Here’s the good news: There’s a simple way to avoid losing out.
According to the Australian Competition and Consumer Commission, or ACCC, the older your home loan, the more you’re paying compared to new customers.
How much more exactly? The ACCC’s final report shed some light on the subject.
As of September 2020, here’s the average difference in interests rates paid by new and existing variable rate home loan customers:
- Customers holding a home loan for 1-3 years paid 0.47% more, on average.
- Customers holding a home loan for 3-5 years paid 0.58% more, on average.
- Customers holding a home loan for 5-10 years paid 0.71% more, on average.
- Customers holding a home loan for more than 10 years paid 1.04% more, on average.
This issue is so common that it has a name: the loyalty tax. While it’s not an actual tax by definition, the premium being paid by existing home loan customers hurts the wallet just as much.
The Simple Solution That Could Save You Thousands On Your Home Loan
Have you checked home loan interest rates lately?
If you’re an existing home loan customer, you could save thousands of dollars on repayment simply by switching to a new lender.
If you haven’t yet switched, you’re not alone?
Common Reasons Why Australians Aren’t Switching Lenders
Despite the clear benefit of switching lenders & saving thousands on repayment, most people are sticking with their current home loan.
Why?
Here are the most common reasons, according to the ACCC:
- Customers assume their loyalty to their current mortgage company will result in better rates or payments.
- Many borrowers aren’t given transparent pricing by mortgage companies.
- Some believe it will be too complicated to switch.
- Many don’t feel the need to switch and save unless prompted by a change to their personal financial situation.
Here’s the truth: It’s simple to switch lenders and save thousands when you choose Mortgage House.
Mortgage House offers wider credit specifications and industry leading tech. All of that comes together to ensure you get the best rate for your specific circumstances.
Click here to get started.
