The vast majority of Australians are not refinancing despite historic lows in interest rates, according to new research released by Yellow Brick Road.
The wealth manager and Vow Financial parent company has conducted research suggesting 83 per cent of Australians with a home loan have not refinanced in the period of falling rates, with 19 per cent not refinancing in over five years.
In addition, 40 per cent of the 1,000 survey respondents indicated they had never refinanced respite changing conditions, a trend YBR executive chairman Mark Bouris has questioned.
“It’s outrageous to think people are still paying high interest despite the opportunity to pay less,” Mr Bouris said.
“In effect you’re just handing the banks extra money. Many people take the time to drive to the cheaper grocery store just so they don’t pay an extra dollar for milk, yet when it comes to home loans they stick their head in the sand.”
The most common reasons given for not acting on lower rates were “not believing enough money would be saved” (31 per cent), “thinking the fees and charges would outweigh the benefits (20 per cent) and “perceiving the process as too much of a hassle” (18 per cent).
Queensland was found to have the highest population of “culprits of failing to refinance”, with 63 per cent saying that had either never refinanced or hadn’t for five years or more, followed by New South Wales at 61 per cent.