Do You Need To Pay For More?

One expert says, home credit clients across Australia should pay an interest rate below 4 percent else they are paying too more than it should be. Some lenders even offer a 2 in front of a variable mortgage rate deals. Financial comparative website Mozo's mortgage market analysis showed a gap of 0.42 percentage points between principal & interest loans for homeowners and investors.

Kirsty Lamont, the website's spokeswoman, says borrowers need to be proactive and ask their bank for a better price, otherwise they should switch. The average owner-occupier rate for investors is now 3.99% compared to 4.41%. “The new amount of home loans is 3.5 percent, if you pay anything above that you pay too much. It's time to compare some of the lenders reduced prices”, she says.

Major banks continue to lower fixed mortgage rates. You can now get variable rates below 3% so there are some large savings on offer. The Commonwealth Bank, ANZ and Westpac all offer owner occupants paying principal & interest a set price of 3.28% for three years, while NAB offers 3.29%.

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