Aussie borrowers’ lack of interest in home loan rates

DISENGAGED mortgage customers could be costing themselves tens of thousands of dollars because they do not know their interest rate.

Alarmingly new research compiled by digital mortgage broking platform Uno found 40 per cent of home loan customers failed to know their existing interest rate.

Uno’s data showed for customers with a $300,000 30year home loan on one of the highest rates of 4.72 per cent their monthly repayments would be $1591 and total interest costs are $262,000.

But there’s massive savings to be made – by signing up to one of the lowest variable rates available at 3.64 per cent, monthly repayments would drop to $1370 and the customer would pay $194,000 in total interest charges.

Uno’s founder Vincent Turner said the banks did not make it easy for customers to know the interest rate they are being charged.

“It is on your statement and on your internet banking but it’s one of those things when you first take out the loan you are probably on a pretty decent rate,’’ he said.

“But over time the rate that you are on and the rate that is available to someone right now for a new-to-bank customer tend to drift.”

For owner-occupiers on principal and interest loans there are many great deals under four per cent.

Mr Turner said customers should review their home loan every few years.

The Reserve Bank of Australia board has kept the cash rate on hold since August, 2016 and it’s expected there could be some time yet until it does move again.

Despite this lenders have still been moving deals up and down throughout the year.