The Reserve Bank leaves the cash rate at 1.5 per cent but are borrowers getting the best deal?

ANALYSIS: The Reserve Bank of Australia has kept the cash rate on hold again but that doesn’t mean customers should put their feet up. There are more deals to consider.

HOME loan customers are being urged not to be complacent and ensure they are on the best deal possible by reviewing their loan.

Despite the Reserve Bank of Australia’s governor Philip Lowe keeping the cash rate on hold at 1.5 per cent today, experts say there are still plenty of rock-bottom rate deals available that consumers should be pouncing on.

RBA governor Philip Lowe has kept the cash rate on hold at 1.5 per cent.

New analysis crunched by financial services firm canstar.com.au has revealed the best three variable rate and three-year fixed rate mortgage deals.

RATES: How the US cash rate will affect you and your debt levels

The deals are for an owner occupier with a $300,000 30-year principal and interest home loan with a loan-to-value ratio of 80 per cent (so a 20 per cent deposit.)

Home loan customers to ensure they are getting the best mortgage deal possible.

These are the best deals on their database:

BEST VARIABLE RATES

1. Reduce Home Loans, Rate Buster Standard Variable Home loan, 3.39 per cent, $1329 monthly repayments.

2. Homestar Finance, Refinance Owner Occupied Special, 3.44 per cent, $1337 monthly repayments.

3. Freedom Lend, Freedom Variable principal and interest, 3.54 per cent, $1354 monthly repayments.

BEST THREE-YEAR FIXED RATES

2. Greater Bank, Ultimate Discount Fixed 3 year package, 3.74 per cent, $1388 monthly repayments.

3. Queenslanders Credit Union, Special Fixed Rate principal and interest, $1394 monthly repayments.

HOW TO GET AHEAD FASTER

Canstar spokeswoman Belinda Williamson has urged all mortgage customers to review their loans over the summer period and make more frequent repayments if possible — so fortnightly ahead of monthly.

Canstar spokeswoman Belinda Williamson said the summer holidays was the perfect time to give yourself a home loan health check.

“A home loan-hack that will impact the interest you’ll pay over the life of the loan is to make more frequent repayments,’’ she said.

“The more beneficial method of calculating fortnightly repayments is when the lender divides the monthly repayment by two and requires you to pay every two weeks.

“This means you’re not only paying more frequently due to the varying number of days in each month but you’re also paying 13 months’ worth of repayments in the year.”

LOOK TO REFINANCE

Aussie Home Loans chief executive officer James Symond has expected the cash rate to stay on hold for the early part of 2018 but said borrowers should still be taking advantage of stellar deals.

Aussie CEO James Symond said rates are continuing to move which means borrowers have to more frequently review their loans.

“If there is a better deal available, a refinancing could save thousands of dollars a year and years of the life of a mortgage,’’ he said.

“It is important for borrowers to create a budget and financial goal for 2018, with an allocation of wages to be saved automatically to build a war chest for investment or principal repayments”.

Realestate.com.au’s head of financial services Andrew Russell said for borrowers who are unsure on what to do to seek help.

“Shop around, make sure you’ve got the right loan for you by doing research online and by speaking to a mortgage broker,’’ he said.

“It’s important to understand the features, flexibility and interest rate of each individual loan and how those things will affect your repayments and ultimately, your lifestyle.”

PAY EXTRA

If you can tip more than the minimum repayments into your loan each fortnight or month it will help drastically shave down your debt and reduce the interest charged.

Canstar.com.au data found on a $300,000 30-year owner occupier principal and interest loan a customer who pays an extra $50 per week will make monthly repayments of $1706 and take six years and four months off their loan’s duration.

Making extra repayments can help to significantly reduce the mortgage interest bill.

It will also save the customer nearly $58,000 in interest charges.

By paying an additional $100 per month it will boost the customer’s repayments to $1906 per month and cut 10 years and three months of their loan duration.

It will also save them almost $93,000 in interest charges.

Ms Williamson suggested a good way to enforce extra repayments was to make them automatic.

“Organise a direct debit right after your pay lands in your account so it’s out of sight, out of mind,’’ she said.

@sophieelsworth

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Originally published as The Reserve Bank leaves the cash rate at 1.5 per cent but are borrowers getting the best deal?