Lendi Group data shows 15% of the nation have revised their mortgage activity since May

Lendi Group data shows 15% of the nation have revised their mortgage activity since May

Since the RBA announced the first cash rate rise in May 2022, there has been a 15% increase in Lendi accounts ending 31 August as households revise their options, seeking mortgage relief.

Lendi Group CEO David Hyman said, “Homeowners with mortgages in NSW (41%) are feeling the strain the most, followed by Victorians (32%), Queenslanders (28%) and South Australian’s (26%) – all reporting they are still ‘constantly’ concerned about the increases.

Hyman cautions however that while mortgage activity is rising, it shows a considerable proportion of homeowners have remained passive about reviewing their mortgage, and amid further increases it could cost them thousands – but it can be avoided.

“Sydney-siders for example who are continuing to remain the most worried about their mortgage, could be avoiding upwards of $140,000 of extra repayments over the life of their loan – essentially wiping out continued rate hikes.”

Hyman is also cautioning mortgage holders on fixed rates, urging them to be vigilant to avoid ‘revert rate shock’.

“We’re seeing 6 in 10 (59%) of mortgage holders on a fixed rate who have not yet made plans for when their fixed rate expires. A further 2 in 10 households admit they were not even aware of their fixed rate expiry date.”

“Mortgage knowledge really is the power that will save borrowers in this situation.”

“There are $130 billion worth of fixed-rate loans due to expire from mid-2023, and with mortgage revert rates typically higher than a lender’s discount variable rate, it means households face being automatically placed into significantly higher repayments, as soon as their fixed rate term ends.”

Lender Loyalty Tax’ is only going to increase – challenging this could save thousands

For those Australians who have already taken steps and challenged their lender loyalty, Hyman says they have made significant savings by doing so.

“Lendi data shows as of August, on average, banks are charging new customers rates that are 86bps lower than rates charged to existing customers, while the Big 4 are charging 91bps less for new customers.”

“On a $500,000 loan lender loyalty means mortgage holders could be missing out on very significant savings, approximately $70,000 over the life of the loan ($332 per month) increasing to $99,000 ($332 per month) on a $750,000 loan and $140,000 saving ($467 per month) on a $1,000,000 loan.”

“We want Australians to know there are options out there to help aid their cost-of-living pressures and that can begin for a household by acting now.

“More and more homeowners are understanding the value of mortgage brokers in helping navigate the market, securing finance that best suits their individual needs.

“Such savings is what is seeing the broker market share continue to increase, now sitting at around 70% over the last few years.”