Many Australian homeowners may not be aware that they can save a lot more money when they repay their mortgages by simply looking into important home loan features.
Financial comparison site Mozo.com.au has released its 2024 Home Loan Report, which tackled several ways that Australian homeowners can save up to $100,000 on their repayments.
Rachel Wastell, Mozo’s personal finance expert, said that there were some Australians who paid more than $1,000 per month in order to cover their mortgage as the rates have risen at the most aggressive levels since the early 1990s.
“As the Reserve Bank of Australia isn’t set to cut rates until later this year, homeowners are understandably concerned with how they’ll manage repayments. However, Mozo research shows more than half are unaware of critical home loan features that could save them thousands,” said Wastell.
The report found that about 42% of Australian mortgage holders were not aware of their home loan interest rate, while 56% were not sure about their interest rate, type of home loan, or their loan-to-value (LVR) ratio.
“The rise in interest rates may be hitting homeowners hard, but there are ways to ease the burden, and that starts with understanding your loan,” said Wastell.
Wastell suggested looking into alternatives to the four major banks as the report found that borrowers who engaged with lenders that were not part of the big four could save about $436 per month in repayment costs.
“The 2024 home loan winners list reveals that fintechs, regional banks and credit unions are the unsung heroes of home loans, and that borrowers who shop small could see substantial savings,” said Wastell.
Other possible ways homeowners can save on their repayments are banking with an offset account, regularly comparing rates, increasing the frequency of payments, considering a split rate loan, and earning income from one’s home.
