Nearly half of mortgage holders in Australia have experienced an interest rate rise since August 2016, despite the Reserve Bank Australia (RBA) holding the cash rate.
The new research from comparison site Mozo also found that 44% of mortgage holders have a home loan rate of about 4%, despite the new benchmark for an owner occupier paying principal and interest being under 3.70%.
The company also compared 525 home loans from 88 financial providers as part of its Expert’s Choice Awards. The judges found that the big banks ranked poorly, with 70% of mortgage holders unsatisfied with their current mortgage rate. Smaller banks fared better with nearly 60% of respondents believing their home loan to be competitive.
Mozo director Kirsty Lamont said, “What we're seeing is that many mortgage holders consider the banks offerings to be 'good enough' when really, they're offering their best deals for new customers while hiking rates for existing customers.
"The goalposts for what may be considered a competitive mortgage rate has shifted from a year ago. 3.70% is the new standard for an owner occupier paying principal and interest. It is important brokers are aware of current market rates to ensure their clients are informed in securing the best possible deal.
"Mozo research indicates there are high levels of dissatisfaction among big bank mortgage customers, yet they are unwilling to switch lenders. Brokers should be aware of this mindset and encourage their clients to seek out a better mortgage deal that is going to save them thousands of dollars over the life of the loan."
Their awards comparison also showed that only 27% of Tasmanians have a rate above 4%, compared to 63% of mortgage holders from Northern Territory. Tasmanians are also fiercely loyal to their banks with 91% saying they would not consider switching.
Mortgage holders in the 25-34-year-old age bracket were most like to switch, with one in four considering a change in provider while only 8% of mortgage holders over 65 years considered the same.