However there are others who are taking matters into their own hands.
Traditionally it takes a lot for people to quit their bank, but it's become easier than ever, and there are big savings to be made by those who make the move.
A warning for the Big Four: while the Reserve Bank held back on cuts today, many families are done with waiting.
More stories from Today TonightAccording to Smart Investor Magazine editor Nicole Pedersen McKinnon, smart mortgagees will be doing their research and heading elsewhere.
“What’s not getting airplay is that the little guys are already offering rates - some 0.1 per cent or 0.15 per cent below what (the Big Four) are. To put some numbers on that, with a $300,000 mortgage, that’s a $58,000 saving.”Nathan and Deborah Stride have saved thousands by switching their loan provider.
Do you feel let down by the Reserve Bank, or has it done the best thing for our economy?
“We hadn’t really contemplated switching. We were happy where we were, but when you know there's a better deal out there, it’s worth investigating, which is what we’ve done now. If we knew it was that easy to switch, we would have done it sooner.”
They’ve switched their home loan from ANZ to Homeside. Their rate of 6.6 per cent dropped to 6.2 per cent, and they're now saving $153 a month. It’s predicted their simple switch will end up saving them close to $47,000 over 30 years.
The amount of money is offset a little bit by its two years’ saving on total loan period, so to be mortgage free two years sooner is just as much of an incentive.
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For Deborah “it’s money in our pocket, as opposed to going to the big banks, and that’s a win.”Scott Pape is the Barefoot Investor, giving independent advice to mums and dads about the best loans on the market, without the kickbacks many mortgage brokers receive from helping you switch.
“The average home owner can potentially save about ten per cent of the loan amount, so for the average person that can be about $30,000, which is nothing to sneeze at,” Pape said.
More stories from reporter James Thomas“If you go and see a mortgage broker they get paid two ways. First is an upfront fee, upwards of $2000. They also get paid a trailing commission - a dirty kickback every month you stay in that loan, and that can be $600 a year.”
As part of his Home Loan Fast Start Guide, Pape ran the rule over 1400 loans on the market, determining the three best home loans for families with a typical $400,000 mortgage, over a 30 year period.
Pape looked at three benchmarks when looking for best home loan:
- 1. Unlimited extra repayments
- 2. Redraw facility
- 3. 100 per cent offset account
Moneyhound: See the top five lowest rate home loans in the market
According to Pape, of the three that were picked, Homeside Lending, which is a division of NAB, was a standout winner, with low rates and great flexibility.
The second was Suncorp’s Money Manager Home Loan, with a really attractive rate, and really good features for the average home owner.
The other was Bankwest, a division of CBA. It had a lot of really good features, a competitive rate, and if you have a bit of equity, they offer a bonus rate.
Yahoo!7 Finance: Interest rate decisionReal interest rate cuts are predicted in the coming months, but many are warning short term relief may soon pale in the context of a bleaker, bigger picture.
“The RBA said that the rates are appropriate. Let’s leave them here, and see what happens, but it’s by no means the end of this - rates could definitely fall more, all depending on what happens in Europe,” Pederson advised.
“I think we are likely to see more interest rate cuts, but the sting in the tail is, if we do, it means our economy is starting to go down the tubes, and we want to safeguard against that.”
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Contact details- The Barefoot Investor - www.barefootinvestor.com
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