Mortgage re-financing sky rockets
(10 November 2010 – Australia) Australian’s looking to refinance their mortgages or swap to one with a lower interest rate has more than doubled following announcements by the Reserve Bank of Australia and Commonwealth Bank to raise rates.
Mortgage Choice, Australia’s largest independent home loan brokerage, said that inquiries had sky rocketed to just under 16,700 between Wednesday last week and Sunday, 9000 more than the same period the previous week.
The influx of inquiries included customers of the Commonwealth Bank, who have become enraged by the bank’s decision to raise rates a further 20 basis points above the Reserve Bank’s official cash rate increase.
This has resulted in the Commonwealth Bank’s now laying claim to having the highest home loan rate of the big four banks sitting at 7.81 percent.
ANZ, Westpac and National Australia Bank have sit back silently, however have been tarred with the same brush as the Commonwealth Bank despite having not made any announcements.
Many banking analysts believe that the remaining big four will move outside of the Reserve Bank’s official cash rate increase, with the question being: how much?
Thousands are now on the hunt for a new home loan and are now undeterred by the cost of quitting their current deal.
According to the broker who spoke to Business Day, customers with a A$300,000 mortgage who now face a rate of 7.8 percent could still be better off in the long run by at least A$150 a month if they obtained a new loan at 7 percent - even after paying an exit fee.
ING Direct has sweetened the proposition for customers thinking of leaving their current provider by offering a A$1,000 cash injection for swapping and opening a bank account.
The influx of inquiries included customers of the Commonwealth Bank, who have become enraged by the bank’s decision to raise rates a further 20 basis points above the Reserve Bank’s official cash rate increase.
This has resulted in the Commonwealth Bank’s now laying claim to having the highest home loan rate of the big four banks sitting at 7.81 percent.
ANZ, Westpac and National Australia Bank have sit back silently, however have been tarred with the same brush as the Commonwealth Bank despite having not made any announcements.
Many banking analysts believe that the remaining big four will move outside of the Reserve Bank’s official cash rate increase, with the question being: how much?
Thousands are now on the hunt for a new home loan and are now undeterred by the cost of quitting their current deal.
According to the broker who spoke to Business Day, customers with a A$300,000 mortgage who now face a rate of 7.8 percent could still be better off in the long run by at least A$150 a month if they obtained a new loan at 7 percent - even after paying an exit fee.
ING Direct has sweetened the proposition for customers thinking of leaving their current provider by offering a A$1,000 cash injection for swapping and opening a bank account.
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