MILDURA home owners could save tens of thousands of dollars by refinancing their loans, according to non-bank lender Reduce Home Loans.
New research commissioned by Reduce Home Loans has ranked Mildura in the top 20 “mortgage belt” regions in Victoria by how much they could save if they refinanced as rate increases began to bite.
Mildura ranked 19th of the top 20 Reduce Home Loans Mortgage Winners Report, which nominated those regions as having the potential of saving “big dollars” by refinancing.
The ranking was based on the 4717 houses in the Mildura postcode with a mortgage according to the 2016 Census, a median house price of $318,344 in June 2019 and $417,500 in June 2022 and an outstanding mortgage of $270,331 in June this year.
It was also based on refinancing from 4.75 per cent interest to 3 per cent, which showed savings for Mildura home buyers over 27 years of $85,468.
Reduce Home Loans general manager Josh Beitz said this research was timely given that a host of borrowers had either recently come to the end of a two-year or three-year fixed-loan term, or would do so shortly.
“Some borrowers who have reverted, or will soon revert, from a fixed to a variable loan might find themselves on a higher interest rate, which, of course, would be concerning,” he said.
“It’s important for those borrowers that can afford the rollover rate not to be complacent.
“That’s because the Reserve Bank is likely to keep increasing the cash rate, which will translate into much higher mortgage rates.
“Lenders always assess borrowers at higher interest rates, so as rates keep increasing, people’s borrowing power will be reduced.
“As a result, many borrowers will be locked out of refinancing.
“That’s why borrowers should seriously consider refinancing now to a comparable loan with a lower interest rate – because as rates keep increasing, borrowers can become ‘mortgage prisoners’ unable to escape spiralling interest rates.”
Mr Beitz said the interest rate gap between higher-rate and lower-rate loans was already large, and was likely to keep growing as interest rates keep increasing.
