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According to Lendi’s data, which compared “backbook and frontbook data”, new customers were, on average over June, paying rates that were 86 bps lower than those of existing customers.
Over the past 12 months, this difference has oscillated between 69 bps and 90 bps.
For new customers with the big four banks, this figure jumped to 91 bps lower over the same month, marking the largest gap in rates since October 2021.
The impact of this difference, according to Lendi’s calculations, can cost existing borrowers over $70,000.
According to the broking group, the total repayment difference between a 25-year, $500,000 loan at 2.39 per cent and 3.25 per cent is an extra $66,329 for the latter.
Between 2.34 per cent and 3.25 per cent, this figure jumps to $70,072.
Speaking of the figures, Lendi chief executive David Hyman commented that this is an “eye-popping number”.
He added that “for the most part it’s apathy that’s costing people”.
“We encourage homeowners to speak to their broker to assess their options, shopping around they can save tens of thousands of dollars,” Mr Hyman said.
“By refinancing and saving on their ‘loyalty tax’, homeowners could potentially reclaim the last two Reserve Bank of Australia rate increases.
“Interest rates will likely continue to be passed on in quick order and successively and we want people to avoid unneeded mortgage stress, particularly in the current climate of high cost of living.”
Mr Hyman later noted that a conversation with a broker “can save thousands per year” for borrowers.
“We would encourage everyone to be monitoring their home loans and knowing exactly the position they’re in and understand the steps they can undertake to minimise their pain,” Mr Hyman said.
“Further, we have $130 billion worth of fixed rates coming off next year so we know there are many thousands of homeowners that might not be feeling the pinch now, but need to be preparing for that change to come through next year. It’s never too early to start having these conversations.”
The findings echoed previous calls made by government bodies for borrowers to consistently review their repayment rates.
In 2020, the Australian Competition and Consumer Commission’s (ACCC) released its Home Loan Price Inquiry final report, with one recommendation being for lenders to remind variable customers to review their rates.
However, recent data has suggested that lenders are not only failing to encourage refinancing, but are actively attempting to prevent borrowers from doing so, according to brokers.
As previously reported by The Adviser, lenders have, in the wake of rising rates, refused brokers from submitting a discharge authority online.
Further, lenders have been reported to provide borrowers with reduced rates that were previously not available as a means to halt any intention to refinance.