Australian homeowners might be too lazy to make sure they have the best home loan, and some might not even know what type of mortgage they have, according to two new studies released this week.
Australian homeowners might be too lazy to make sure they have the best home loan, and some might not even know what type of mortgage they have, according to two new studies released this week.
Despite low growth in wages and record amounts of household debt, a survey by Galaxy Research for non-bank lender State Custodians Home Loans, found that only 13 per cent are always on the lookout for better home loan rates.
The survey of 1,006 Australians conducted between 7 and 10 April this year, also found that one third of Australians are apathetic about shopping around for the best home loan deal.
One in six people (17 per cent) admitted that while they’d like to look for a better deal, they either weren’t sure how to, didn’t have the time, or couldn’t be bothered.
And 16 per cent said they don't even consider shopping for a better rate.
One-third of interest-only borrowers might not realise the type of loan they have: UBS
The State Custodians survey follows up a report by UBS that supports a view that Australian mortgage holders might be a little too relaxed about their home loans.
Related content: One third of all home loans based on "lies": UBS
The UBS report showed that up to a third of borrowers with interest-only loans may not realise they have them.
The global investment bank surveyed more than 900 people who had taken out home loans over the past year. When cross-checking their survey results against official data, the UBS analysts noticed a significant anomaly with interest-only loans.
APRA's data showed that more than 35 per cent of new loans over the past year were interest-only, but only 24 per cent of survey respondents told UBS they had taken out interest-only loans. After ruling out sampling problems in their data, UBS concluded that almost a third of interest-only home loan customers might not realise they have an interest-only mortgage.
Managing your home loan
Joanna Pretty, general manager of State Custodians, says customers should get in touch with their lenders every now and then, and make sure they are getting the best deal for their circumstances.
“You’re dealing with a lot of money so it’s not in your best interests to just forget about your loan," she said.
"Even if you get a small discount, that can end up making a big difference overall," she said.
Alarmingly, the State Custodian survey found that men (73 per cent) were more likely than women (59 per cent) to shop around for the best mortgage deal.
Read more about the Australian mortgage market:
One third of all home loans based on "lies": UBS
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