Are you one of the 2 in 5 Australians unaware of the amount of interest being paid on their home loans?
A recent survey carried out by Mortgage Choice has found that about 40 per cent of Australians don’t know their current home loan interest rate and it could be costing them significantly.
The survey revealed that Australians over the age of 60 were most likely to be unaware of their interest rate (46 per cent). It also found that just over 40 per cent of borrowers under 30 didn’t know their interest rate, while 26.9 per cent of those aged from 30 to 39 were unsure of theirs.
Mortgage Choice chief executive John Flavell believes that many borrowers are taking a “set and forget attitude” towards their mortgage that could be “costing them substantially over the longer term.”
“A home loan is one of the biggest financial investments a person will make in their lifetime. And, if they don’t review it on a regular basis, they could end paying a lot more than they should,” he said.
Flavell also noted that borrowing rates had dropped significantly over the past two years. This means that borrowers who haven’t taken the time to review their home loan are likely to have paid more than necessary.
“In recent months, we have seen many of Australia’s lenders adjust the pricing across their owner-occupied and investment home loan products. These slight changes can make a significant difference to what a borrower has to pay each month,” he said.
Avoid paying too much interest
The Mortgage Choice survey outlines the importance of regularly reviewing your home loan rate and keeping up to date with any interest rate changes.
If you are unhappy with the interest rate you are paying you should chat with your lender and try to negotiate a better deal, otherwise shop around and see if there is a better loan out there that would suit your needs.