3800 Southern Downs households can save $5000 a year
WOULD you like to turn your home loan into a super stash of cash?
With a little legwork, thousands of Southern Downs households could find more than $5000 in their pockets by year's end.
In our region, 3811 home owners have a mortgage, with the median monthly repayment sitting on $1300, according to 2016 Census data.
Finance experts say that, based on an average 30-year home loan of $371,100, households could save $5412 a year in repayments.
All you need to do is re-negotiate the terms of your loan with your current lender or, if they won't come to the party, simply jump ship for a credit provider offering better terms. This could save you more than $162,000 over the life of the loan.
In Australia, there are many home loan comparison companies including Canstar, Mortgage Choice, Compare the Market, Infochoice and Lendi.
Tom Godfrey, spokesman for national consumer advocacy organisation Choice, advised customers to avoid the "lazy tax”.
"It's worth remembering banks don't reward loyalty,” Mr Godfrey said.
"Getting your existing lender on the phone and pushing for a better deal costs you nothing and can really pay off.”
Lendi co-founder David Hyman said a 50 per cent increase in traffic on his company's online comparison site showed Aussies were getting smarter about making their mortgages work for them rather than for the banks.
"It's all about making sure you get the best deal,” Mr Hyman said, revealing it was vital to get a clear picture of what all the nation's banks and non-banks had on offer.
He said his second key piece of advice was encouraging people with interest-only loans to switch to "principal and interest” loans.
This would allow your repayments to be spread across the amount you borrowed and the interest you pay, he said.
Mortgage Choice CEO John Flavell said some lenders were offering "very sharp” fixed rate mortgages and these could serve some home owners well.
"While we are seeing fewer borrowers locking into fixed rate mortgages, it's important to note that some lenders are still offering very sharp rates in this area,” he said.
Mr Godfrey issued a "word of warning” for people opting to use brokers.
"Be cautious about using a mortgage broker as they typically receive incentives to sign you on to larger loans and they don't have to find you the best loan, just one that isn't inappropriate.”