the sneaky home loan charges that can sting

Written by The ReReport

BORROWERS are neglecting their biggest household expense ”” their mortgage ”” by failing to reassess the fees and charges they are paying. A majority of consumers say they often analyse their everyday living expenses including utility bills, insurance, mobile and broadband plans, but they are not bothering to check up on their home loan costs.New independent research commissioned by online mortgage platform Lendi found 78 per cent do check ups on their everyday expenses, but 54 per cent of people don’t bother doing the same for their home loan.MORE: HOW MUCH OF YOUR SALARY SHOULD GO TOWARDS YOUR MORTGAGE?MORE: HOW TO GET FREE FINANCIAL HELPLendi’s managing director David Hyman said customers can easily be getting gouged by their lender if they fail to do regular checks, particularly after many banks hiked variable rates.“We see owner occupier customers coming through on rates in the five per cent range today, it’s insane,” he said.“The lowest rate available is 3.65 per cent or thereabouts but there are lots of customers on old rates.”Lendi calculations show borrowers with a $300,000, 30-year, loan could save $4524 a year by switching to the lowest rate.This is based on them being owner occupiers, paying principal and interest and being charged a rate of 3.65 per cent.Some rates are as high as 5.74 per cent.Investors have to pay slightly higher rates but Mr Hyman said they should aim to be as close to four per cent as possible.media_cameraA young couple reviewing their home loan while having a cup of coffee at home. Picture: iStock.Three of the big four banks — all except National Australia Bank — pushed up variable interest rates for owner occupiers and investors recently, adding hundreds of dollars extra for many mortgage customers.However a softening house market and intense competition among banks has put customers in the box seat to nab themselves a cheaper deal.Customers should check their annual fees and charges and interest rate and compare them with other deals to see if they are paying too much.The Mortgage and Finance Association of Australia’s chief executive officer, Mike Felton, said being loyal to your lender does not pay off.“The lenders offer better deals to new customers than the deals they offer to existing customers,” he said.“I think it’s in everybody’s interests that they should be making additional repayments if they can.“If you don’t have the ability to do it yourselves then get help, ask a mortgage broker.”The research found one in five people occasionally pay their bills late (22 per cent), which can impact their credit scores and limit their ability to get credit.Positive credit reporting was recently introduced in Australia which means information about a customer including how many credit accounts are held, what accounts have been opened and closed, the date default notices were paid and whether repayments were met will be scrutinised.This will help those with few blemishes on their credit files get better credit published as Cut your mortgage by $4500 a year

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