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ISCOVER
Staff Reporter
Borrowers with variable interest rate loans have potentially missed out on thousands of dollars of savings, according to RateCity.
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Since November 2011, the Reserve Bank has dropped the cash rate six times, reducing it by 175 basis points. Standard variable home loan rates, however, fell by 133 basis points on average, according to RateCity.
The 42 basis point discrepancy is worth $80 in monthly repayments for a $300,000 home loan, a statement from the company said.
“The RateCity research should be a wakeup call for borrowers: don’t take your home loan for granted,” said RateCity spokesperson Michelle Hutchinson.
“Even though variable home loans have been falling for more than a year, which has saved borrowers $264 in monthly repayments for a $300,000 mortgage, many borrowers missed out on further savings because most lenders didn’t pass on rate cuts in full.
Ms Hutchison said she expects the trend to continue this year where lenders move rates independently of the Reserve Bank.
“Lenders have given themselves room to move independently of the Reserve Bank by not passing on the full rate cuts so it won’t be surprising to see more out-of-cycle rate movements this year.
“While further relief may be in sight, borrowers need to concentrate on the actual rate they are paying. Keep track of your home loan, compare it online to the rest of the market and re-negotiate or switch to a better deal.”
