More than eight out of ten Australians do not know what interest rate they are paying on their home loan, as this article featured at Money Saver HQ reveals…
It’s the biggest household expense for many people yet only 16 per cent know their mortgage rate, and the proportion is declining, according to new research commissioned by NAB-owned UBank.
It also found 77 per cent of Australians know their car registration number and 91 per cent know their online banking password, but only about 40 per cent know their bank account numbers.
UBank CEO Lee Hatton said it was surprising to see such a low level of knowledge about home loan interest rates.
“This number is so important to people’s financial wellbeing – it may mean the difference of several thousand dollars every year,” she said. “Every percentage point counts.”
The survey of more than 1000 people also found that the number of people who could recall their mortgage rate had dropped sharply since 2013, when it was more than 25 per cent.
Mortgage and consumer finance specialist Lisa Montgomery said complacency over mortgage rates had grown since official interest rates had been falling since November 2011.
“I guarantee that percentage would go up if interest rates were on an incline,” she said.
“We don’t pay as much attention to it, and we just don’t review it.
“A lot of people are paying way too much on their mortgage. If you are not sitting around the 4 per cent mark you are paying too much.”
Ms Montgomery said borrowers should visit comparison websites to get an idea of the current mortgage rates available, then contact their lender and ask for a better deal.
“It could save you thousands of dollars because the lender wants to keep you as a client,” she said.
“It’s a lot easier for the lender to keep you than to go and find a new client. It’s almost guaranteed that if you haven’t asked for one before, you will get a discount.” UBank has calculated that getting a good mortgage rate has the potential to save borrowers up to $100,000 over the life of a loan.
Ms Hatton said a lot of recent changes in the mortgage market had made it difficult for people to keep track of their interest rates, and they should regularly review their loans.
“It’s also important to consider any fees and charges you may be paying, as often what looks like a great rate on the surface can end up costing more,” she said.
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Jason Thomson | Mortgage Adviser and Finance Broker | Smartline Cairns