Lenders have what are known as Index/Indicator or Standard variable interest rates and they offer discounts off these rates to borrowers depending on several factors.
As competition has increased within the mortgage industry these discounts have also increased. I review borrowers’ interest rates regularly and approach lenders seeking better discounts for my clients. Lenders do not always drop the client’s interest rate but in many cases they do.
As an example of this I have one couple who when they established their home loan in 2014 were receiving a discount of 1.17% off their lender’s index rate. In 2018 the discount was increased to 1.75%, in 2020 it was increased to 2.15% and earlier this year the discount was increased to 2.53%.
In real terms what did this mean? When I did the last review earlier this year the bank’s index rate was 8.83% so had they stayed on the 2014 discount their interest rate would be 7.66%, however due to the rate reviews their current rate is now 6.30%.
The savings in interest can be quite substantial. How much interest could you be saving if you upgraded your interest rate to a 2024 interest rate?
Please call me for an obligation free discussion if you or someone you know hasn’t had their home loan interest rate reviewed in recent times.
Tim Helman
Professional Mortgage Advisors Pty Ltd
Mobile: 0410 439 590
