What to do with this week's least surprising news

While other events this week may have blindsided us (Super Bowl, anyone?), the RBA’s decision to keep rates on hold did not. On top of today’s announcement, here are some other signifiers that might suggest it’s time to check your home loan rate.

As anticipated, the Reserve Bank chose to keep rates on hold for a 17th consecutive month, leaving the cash rate at 1.50%.

The reasons are pretty straightforward: a low interest rate is in line with sustainable growth in the economy and the RBA’s goal to achieve the inflation target – which is between 2% and 3% – over time. The target is easing closer, however: inflation now sits at 1.9%, meaning there could be a hike later this year.

Tim Toohey, the global economist at Ellerston Capital, is predicting one, telling The Australian Financial Review today that the cash rate could be lifted in the second half of the year, as part of a three-year tightening process by the RBA.

“On our forecasts, the net impact of raising interest rates by 125 basis points on household income over a three-year period would be entirely manageable,” Toohey said, adding the Australian household sector was unlikely to shed too many financial tears as the RBA “recalibrates policy settings towards neutral.”

Why so many Australians are refinancing their home loan this month

On top of today’s RBA announcement, some other signifiers might suggest it’s time to check your home loan rate.

February is one of the most popular months for refinancing because at the start of the year people sort out their finances and get their homes in order, so they can reap the benefits of savings all year long.

Another reason for refinancing is to consolidate debt from all that Christmas/Summer spending.

UNO’s own survey of 1500 mortgage holders also revealed the4 key risk factors that mean someone is more likely than average to be paying too much for their home loan:

Data visualisation

1. You don’t know your rate

Our research found 40% of Australian mortgage holders don’t know the interest rate they’re paying on their home loan and are likely to be paying off their mortgage at a much higher rate than they should be.

2. Your home loan is with your childhood bank

The same research found one in five Aussie mortgage holders has a loan with the same bank they banked with as a child – or the same bank as their parents. And being loyal does not equate to a better deal: UNO found loyal customers pay on average 20 basis points more in interest than those who have shopped around for a better deal. If you live in Sydney, for example, that equates to more than $1200 a year. To find out how much it’s costing you in your city, watch our CEO break it down on the Today Show.

Find a deal

3. House prices have gone up since you got your home loan

If the value of your property has increased, your Loan-to-Value Ratio has likely decreased, which is a good thing. It means you can potentially negotiate a sharper interest rate than you’re on now (that negotiation is something we can do on your behalf, if you like).

4. You went through a broker or big bank to get your current loan

As our CEO explained in yesterday’s Australian Financial Review, traditional brokers typically send 75% of loans to three banks. On the flip side, three-quarters of our loans are sent to 12 banks – and two-thirds of all our loans go to non-major lenders. Why? Because often, when the customer sees what the broker sees, the non-major lenders provide the better deal.

If your new year’s resolution is to save more dough and you answer yes to any of these four risk factors, then refinancing your home loan could be a great place to start.

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Kathryn Cretney
November 14, 2024
Paul helped us from day one before we even arrived in Australia so we knew exactly what we needed to prepare. He’s got a tonne of knowledge and was really lovely and supportive to deal with. Helpful and easy going. Would highly recommend - now in our first Aussie home and Paul made the process all very easy!
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November 14, 2024
We received excellent service and a tailored solution to our home loan requirements from Uno. Paul kept us informed at all milestone stages and throughout the process he demonstrated a ‘can do’ attitude that ultimately allowed us to get over the line and meet our deadline. We’re most grateful and very impressed. Highly recommend
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Amanda Pearce
November 7, 2024
After just four months in Australia, our New Zealand home sold, prompting us to stop renting and invest locally. We found Paul through a Kiwi Facebook group, and his exceptional service exceeded our expectations. From initial contact, Paul provided clear explanations, friendly communication, and prompt responses to our queries, making our mortgage process remarkably smooth. We highly recommend him.
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Dom Saric
November 3, 2024
Mike Parsons went above and beyond to ensure that our refinancing journey was painless and successful. He was communicative, accessible (even working while on holidays!), and his knowledge of the systems at play meant that he picked up on things that other brokers missed. Would 100% recommend Mike, and will definitely be back next time we need a broker.
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Ashleigh Breaden
October 31, 2024
Mike Parsons handled our refinance of our home loan with ease and a depth of knowledge that ensured we got the best deal possible for our situation. We didn't have an easy one to solve for with my husband being self employed and we were consolidating finances as well for a car loan. But Mike handled it all for us and once we had provided him with all the documents we literally didn't have to do a thing after that, it was so easy and so quick we are super happy with the experience! Top notch! Highly recommend!!
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Kyle Richards
October 10, 2024
Absolute legend, helped me through the first home buyers scheme, explained everything in a way that made sense, was very knowledgeable and a joy to work with.
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Chloe S
October 8, 2024
Mike Parsons made it possible for us and the in laws to get 2 pretty complicated home loans. He helped us through everything and we'd be happy to use Mike and the team again for anything we needed. Thanks again!
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October 2, 2024
I have gone through 6 different mortgage brokers prior to meeting Andrew Wyers. He is the most patient mortgage broker I’ve encountered and also the most knowledgable about the bank’s lending process and products available. It took me 1 year to find a house I was happy with and Andrew was always there to assist with any issues or questions I had; he always return my phone call, even on the weekends or when his away on holidays. The loan process was smooth and I had no complications. The process with Andrew was again nice and easy, he took the time to find and put together the right package that was suited to my situation. I have recommended Andrew to my family & friends and everyone have been grateful and completely satisfied with his service.
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September 23, 2024
I had not dealt with Scott or UNO before finding them on the internet. Even as an Australian citizen living and working overseas, I knew obtaining a loan would be difficult. However, Scott went above and beyond what I expected from a mortgage broker. I genuinely don’t think you could find another company that works as hard as they did to get my home loan approved. I cannot recommend them highly enough. Everyone I dealt with at UNO were extremely professional and helpful. If you are looking for a broker, you would be mad not to give them a go. Thanks to Scott Wilkinson, Dalby Bajwa, Jena Lasquite and Andrew Pacini. Shaun.
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I had an outstanding experience with Tian Liu. He was incredibly professional and attentive, going above and beyond to meet my needs. His expertise and dedication made the entire process smooth and stress-free. Tian's deep knowledge of the market and commitment to finding the best solutions for his clients truly sets him apart. He was always available to answer my questions and provided invaluable guidance throughout. I highly recommend Tian Liu to anyone in need of a reliable and skilled broker!"
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Tian Liu provided exceptional service throughout the entire process. His professionalism and keen attention to detail were evident from the start. Tian consistently kept us informed and offered insightful advice that made us feel confident in our decisions. He truly cares about his clients and works tirelessly to ensure the best possible outcome. We couldn't be happier with his assistance and highly recommend Tian to anyone looking for a trustworthy and knowledgeable broker.
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