Aussie borrowers could save thousands with lender’s home loan than one of the Big Four banks | Finder

RBA governor Michele Bullock anounced the first cash rate cut in four years earlier this month.

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Aussie prospective homebuyers could save almost $40,000 if they opt for a home loan with a smaller lender over one with the Big Four banks.

Finder research revealed for an average mortgage loan of $640,000, G&C Mutual Bank — which has slashed its variable interest rate to just 5.59 per cent — could save borrowers $1267 a year, or about $38,000 over the course of a 30-year loan.

It comes as just 30 lenders are left to lower their variable mortgage rates after the Reserve Bank of Australia (RBA) lowered its cash rate last week — which underpins interest rates on home loans — by 0.25 percentage points to 4.10 per cent.

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And Finder head of consumer research Graham Cooke said borrowers were flocking to take out a cheaper rate loan.

“Mortgage rates are coming down and borrowers are ready to pounce on cheaper deals,” Mr Cooke said.

“What’s really impressive is that every single bank who has announced new rates since the RBA decision has passed on the full rate cut – showing how competitive the market is.

“This means that right now the power is with the borrower to get a better deal.”

But before signing on to a lower fixed rate, Mr Cooke warned homebuyers to be aware that they could be missing out on even better deals later this year.

“With further rate cuts on the horizon, locking in now could mean leaving money on the table,” he said.

Mr Cooke said if a lender hasn’t dropped their rates yet, that was a red flag.

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The global finance technology company has developed a ‘Finder Score’ to help compare financial products like home loans based on their overall value and benefits.

If a home loan doesn’t have a Finder Score of at least a 9 or higher, there could be a better deal out there, Mr Cooke said.

“If your lender hasn’t dropped their rates yet – that’s a red flag. Another cheaper lender will be willing to snap up your business,” he said.

“Having access to a wide range of lenders significantly increases the chances of securing the best deal.”

CHEAPEST VARIABLE RATE HOME LOANS

Lender – Lowest effective variable rate – Effective date

G&C Mutual Bank – 5.59% – 1 March

The Mutual Bank – 5.64% – 4 March

MOVE Bank – 5.69% – 1 March

Unloan – 5.74% – 21 February

Tiimely – 5.74% 7 March

Source: Finder

*Products include 20 per cent deposit and are available to all