Do you know what your home loan rate is?

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The research by financial software company Pocketbook, in its Home Loan Insights research released earlier this year, shows many home owners are paying as much as 1.75 per cent more interest on their loan than the lowest available rate.

Pocketbook’s chief operating officer Bosco Tan says the analysis of about 1000 of its 200,000 users also revealed 90 per cent of Australians do not know what their home loan rate is.

“Most people are under the misconception that it costs too much to refinance, but that’s not the case. The costs associated with refinancing have reduced significantly over the past couple of years. Our research shows many borrowers believe there’s loads of paperwork involved and put the idea of refinancing in the too hard basket.”­

Multinational banking and financial services company HSBC is the world’s fourth largest bank. It’s headquartered in London and has 32 branches in Australia.

HSBC’s Australian head of mortgages Alice Del Vecchio agrees most home loan borrowers “are typically closer to their home loan repayments rather than the actual interest rate they are paying”.

“There are a number of reasons for this; but it may be simply because the loan was taken out some time ago. But times have changed, interest rates are at an all-time low and the industry is a lot more competitive now.

“There’s usually a trigger that makes people want to refinance. It could be a hard trigger such as buying a new home or renovating, or could be as simple as seeing an ad with a lower interest rate and thinking they’d look into it.

HSBC Australian head of mortgages Alice Del Vecchio


“What we find is that most people don’t like the idea of having to go through the process of refinancing,” Del Vecchio says. “A lot of people think the process is too complicated and when they took out their first loan, it probably was, along with a great deal of paperwork. And, it was typically hard to discharge a mortgage. I think that’s why the Australian market likes personal bankers, banking staff that take a lot of that pain away.

“Refinancing is certainly not as daunting as it used to be. HSBC has experienced relationship managers that will guide you through the entire loan process. They know what they are talking about. They do all the work for you, for example, deal directly with other banks to discharge a mortgage and they have the expertise to handle all your banking needs, not just your mortgage.”

Asked how often a person should review their mortgage rate, Del Vecchio says: “A good personal banker should review all your banking facilities annually, that includes features as well as interest rates. This review certainly doesn’t just look at price, but the exercise could save you thousands of dollars a year.”

She cites a recent scenario in which a professional couple walked into HSBC’s King Street branch in Sydney to ask about the lowest mortgage rate. “One worked for a major bank and was on a pretty good staff rate of 4.15 per cent per annum on a $3 million mortgage. We refinanced their loan at 3.85 per cent which will now save them about $8100 a year.”

This article was originally published on Domain.