New research has suggested that Australians are more in the know about their home loan rates, but more can be done to improve financial literacy.
UBank’s latest annual Know Your Number study has shown that Australians’ financial literacy is improving when it comes to understanding their home loan rates.
This year, 25 per cent of Australians were able to accurately recall exactly what their mortgage rate is, up from 14 per cent in 2018 and 15 per cent in 2017.
A further 64 per cent of respondents could recall an approximate figure for their home loan rate, while the remaining 11 per cent were unaware of their mortgage rate.
The UBank research also showed that 40 per cent of respondents have actively sought out a more competitive rate when refinancing their loan, while 31 per cent made no attempt to do so.
In light of the results, CEO of UBank Lee Hatton said: “While there was an improvement on last year, there are still too many Aussies out there who don’t know their mortgage rate.
“We encourage people to do their research and stay on top of their mortgage rate, as thousands of dollars can be saved by simply understanding where the best offers are and refinancing.”
This increase in financial literacy around home loan rates coincides with the Reserve Bank of Australia’s (RBA) cuts to the official cash rate in June and July this year.
David Hyman, co-founder and managing director of Lendi, noted that the RBA rate cuts had also seen a surge in refinance activity, with the platform recording a 52 per cent increase in the number of people visiting the site to refinance in June 2019 when compared to the previous month.
“Within hours of the June RBA announcement, refinance activity picked up,” he said.
“The July cut has seen this momentum continue as home owners look to reduce their monthly repayments.”
https://www.mortgagebusiness.com.au / “Financial literacy improving among mortgagors” / Hannah Dowling