Home loan discounts on offer for buyers willing to shop around

Home loan discounts on offer for buyers willing to shop around
Home loan discounts on offer for buyers willing to shop around

Property buyers can save big amounts of money if they shop around for the lowest variable interest rate home loan, a new analysis of rates has revealed. 

The Australian Financial Review says a property buyer shopping around for a $1 million home loan with a 20 percent deposit can save more than $6,800 in annual repayments by choosing the cheapest variable rate. 

They suggests a $1 million owner-occupier borrower has nearly 680 fixed and more than 340 variable interest rates to choose from.

Analysis by Canstar found that CBA's wealth package standard variable rate for a principal and interest loan of 4.52 per cent is more than 100 basis points higher than Easy Street Financial Services rate of 3.49 per cent, or about $569 extra in monthly payments.

Commonwealth Bank is the most expensive lender, while Westpac closed the gap when they hiked their rates out of cycle last week.

Adelaide Bank and Suncorp followed, raising their rates by up to 40 basis points.

Suncorp, Australia’s sixth largest lender, lifted its variable rates for the second time in less than six months.

The changes at Suncorp will see all variable rate home loans increase 0.17% p.a. and small business loans increase 0.10% p.a, effective 14 September.

This follows on from its 28 March rate hike of up to 0.12%.

Suncorp Banking & Wealth CEO David Carter said the decision to increase rates was based on the sustained increase in funding costs.

RateCity research director Sally Tindall said Adelaide Bank interest-only variable customers will be bruised by the fact their bank has delivered them one of the biggest out of cycle hikes so far.

“The message for Australian mortgage holders is now clear: Be prepared to shell out extra for your home loan or consider refinancing.

“Despite the hikes, banks are desperate to get new business in the door, throwing rock-bottom rates on the table, but only for new customers."

Tindall added it was best to "own at least 20 per cent of your home."

 

Tags: 
Interest Rates Mortgage Rates

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