NSW on top of home loan rate war says finder.com.au

New South Wales home buyers will benefit most from the war between lenders, despite the Reserve Bank expected to keep the cash rate on hold at its first board meeting of the year on Tuesday, according to one of Australia’s biggest comparison websites finder.com.au (www.finder.com.au/home-loans).

Borrowers in NSW have the biggest loan size on average compared to other states, and would save more money on their home loans if their interest rates were cut.

The finder.com.au monthly Reserve Bank survey of nine of Australia’s leading economists including from major banks, unanimously expect no rate change by the Reserve Bank.

However, Michelle Hutchison, Money Expert at finder.com.au said interest rates could continue to fall this year.

“It’s unusual to see variable home loan rates move outside of the Reserve Bank’s cash rate changes, with the latest lender HSBC to drop its variable rates this month. This shows that anything can happen this year as it’s now harder to predict when variable rates will move and by how much.

“But with the home loan war heating up, it’s good news for borrowers who can capitalise on the competition by comparing home loans and switching to cheaper deals, particularly when borrowers are taking on more debt.”

According to the Australian Bureau of Statistics (ABS) data analysed by finder.com.au, the national average home loan size has grown by 6.4 percent to $319,200 from November 2011 to November 2013.

The average home loan in NSW is the highest across the country at $358,800, an increase of 10 percent over the past two years. With a 0.50 percentage point drop to the average variable rate of 5.34 percent on finder.com.au, NSW borrowers would save more money than borrowers from any other state, at $110 per month. That’s potentially $39,600 over the life of the 30-year loan.

Monthly repayment analysis:

State Average loan size Monthly repayment (5.34%) Monthly repayment (4.84%) Difference
National $319,200 $1,780 $1,682 $98
NSW $358,800 $2,001 $1,891 $110
NT $346,800 $1,934 $1,828 $106
ACT $329,700 $1,839 $1,738 $101
VIC $316,500 $1,765 $1,668 $97
WA $310,600 $1,732 $1,637 $95
QLD $292,800 $1,633 $1,543 $90
SA $256,800 $1,432 $1,354 $78
TAS $212,400 $1,185 $1,120 $65

Source: finder.com.au, ABS Housing Finance, November 2013 data ranked by highest average loan size

“Regardless if there is no change from the Reserve Bank, home buyers should compare home loans in the market as they can save significantly.

“For instance, variable rate home loans on finder.com.au range from 4.49 percent and go as high as 7.05 percent.

“Don’t get caught up in rate cuts because it’s the actual interest rate that matters. There are currently 33 variable rate loans under 5 percent, so it’s more important than ever to make sure you compare home loans regularly this year.”

finder.com.au’s top variable home loans

Lender Variable rate
Loans.com.au – Blackboard Special 4.49% p.a.
UBank – UHomeLoan 4.62% p.a.
RAMS – Discount Home Loan 4.65% p.a.
Illawarra Home Loans – Bank Beater 4.72% p.a.
Yellow Brick Road Rate Smasher 4.73% p.a.

Source: finder.com.au

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