Home loans customers more than 56 weeks ahead of their repayments
MONEY-conscious home loan customers using low interest rates to pay down their mortgages are now more than 56 weeks ahead of their loans.
New data from National Australia Bank shows customers have been pumping extra cash into their loans at a record speed to reach the furthest ahead on their loans in the bank’s history.
Rival big lenders includes the Commonwealth Bank have also seen similar behaviour from customers — four out of five have leapt seven months ahead on their loans.
NAB’s general manager of home lending Meg Bonighton said many customers were maximising the opportunity to pay down debt while the cost of borrowing remained low.
“The low rate environment is a real driver behind customers getting further ahead on their mortgage repayments,’’ she said.
“It’s a once in a lifetime opportunity to get on top of your home loan and customers are making the most of it.”
Customers are making more than minimum repayments on their home loans.Source:istock
One in four ANZ customers are now six months ahead of their repayments while Westpac has 10 per cent of their customers sitting two years ahead.
On a $300,000 30-year home loan the average standard variable rate is 5.11 per cent and the monthly repayments are $1631.
And many fixed and variable rate loans are both below the four per cent mark.
Westpac has 10 per cent of their customers sitting two years ahead on their mortgage repayments. Picture: iStock.Source:istock
Financial comparison website comparethemarket.com.au spokeswoman Abigail Koch said there’s an easy way to pay down your mortgage.
“Pay off your mortgage as if your interest rate was one or two percentage points higher,’’ she said.
“This means that when rates do eventually go up, you’ll be used to paying a higher rate and shouldn’t notice the increase.”
The Reserve Bank of Australia meets for the second time this year on Tuesday and it’s widely tipped they will keep the cash rate on hold at two per cent where it has rested since May last year.
Many borrowers remain attracted to fixed rate loans during the low-rate environment, data from one of the nation’s larger lenders Australian Finance Group found in the December
quarter 14.2 per cent of new loans were fixed — a rise from 11.4 per cent in the September quarter.
The Australian Bankers Association’s chief executive Steven Munchenberg home loan customers continued to be savvy.
“If you can afford to do it (pay more) it’s a good thing to do,’’ he said.
[Source:- News.com]