Mortgage search in your interest

Reporter: Bryan Seymour
Broadcast Date: January 11, 2008

With the United Nations warning of a global recession, it is time to take charge of your mortgage, and we can show you how.

The large Australian banks are already hiking up their interest rates and homeowers are feeling the pinch like never before.

But you don't have to take whatever your lender dishes out. In fact, you can turn the tables on them.

New research shows 80 per cent of Australians who refinance their mortgage reap the benefits.

Mother of three Lyndall Spooner and her husband Tom were paying their bank $2,200 per month. The last rate rise added $50.

Lyndall got on the phone and started shopping around.

"I was very suprised that i could negotiate because I didn't actually know you could do that," she said.

Research from the mortgage and finance association revealed people who switched their home loans to a different lender got a 70.4 per cent got a lower interest rate, 64.8 per cent better terms and conditions and 61 per cent experienced better service and almost half got a better fee package.

"It can save you a lot of money and for the few hours that you might spend on the phone and the time it will definitely take you, you should definitely try because you don't know what you'll actually get," Lyndall said.

"I rang around a few of the banks and the mortgage companies just to see what the best rate they could give.

"I was looking at refinancing my loan and a few of them gave me the standard rate, and when I asked them if that was the best possible rate they could do they then told me they could drop it by 0.7 per cent."

That's a saving of $70 to $80 per month, more than double the increases in bank rates over the last week.

Determined to get her interest charge down, Gill McPhee hunted out a lender who would give her a rock bottom rate.

She did it and didn't even have to pay a penalty charge.

"With a new lender, there are some up-front fees which calculating over the long term, it's going to take two years to pay that off. But in the long term, I'll be saving probably close to $50,000."

Switzer financial services owner Peter Switzer said most homeowners are loyal their lenders... and they shouldn't be.

"There are variable home loans that you can get from companies like One Direct and my rate at 7.7 per cent, that's a long way from the 8.67 per cent people are hearing about.

"Even some of the big names like AMP, their rates are around the low eights, even got some around the high sevens, so this is the sort of information you find when you go looking, but too many Australians won't go looking and as a consequence, they're overpaying."