Procrastinating homeowners could see their monthly repayments jump by $1,250

“Procrastinating ahead of a fixed rate expiring is the worst thing a homeowner can do in this higher rate environment,” said David Hyman (pictured above), co-founder and CEO of Lendi Group.

Australians who fixed their average home loan two years ago are staring down a $1,250 rise in their monthly mortgage repayments once their fixed rate expires in May or June without them seeking a better deal, Hyman warned.

A homeowner who fixed their $585,0000 home loan in 2021 at the average rate of 2.29% would likely face a 3.85% rate hike when they roll off their fixed term. That would equate to extra repayments of $1,250 a month, $15,000 a year, or $376,000 over the lifetime of the loan.

Hyman said mortgage holders would need to act fast if they want to ease their financial burdens.

“Right now, our Lendi and Aussie brokers are saving people an average of 65 basis points through refinancing. While [RBA’s latest] increase of 0.25% will come into effect shortly, currently brokers are helping households with some of the lowest rates in market sitting at 5.24% for fixed and 5.18% for variable, which if secured, is a significant discount to most current revert rates.

“For a family staring down the barrel of an additional $15,000 in repayments per year, this 65bps could mean savings of up to $3,400 a year. In addition, most lenders are still offering $4,000 in cashback. There are immense savings to be made, simply by starting the conversation with a broker.

“Compare this to a homeowner who decides to take the easy option and stick it out with their existing lender, in most cases, they will be stung with hefty loyalty tax, paying far more than they should, all because they procrastinated revisiting their current home loan.

“A mortgage is the biggest expense for most Australians and with interest rates unlikely to materially decrease soon, inaction is simply not an option.”

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