Mortgage fatigue is costing homeowners thousands in refinance savings

Homeowners choosing not to refinance their loans at the top of the market are missing out in thousands of dollars each year in savings, according to new analysis by mortgage brokerage Lendi.

The average homeowner with a $600,000 mortgage could save $350 per month by refinancing, according to Lendi.

Mortgage fatigue is causing more homeowners to accept higher interest rates instead of shopping around for a better deal, which is causing them to pay more, home loan brokerage Lendi says.

A survey of homeowners by Lendi has found three in five are willing to accept higher rates rather than refinancing, with 48 per cent doubtful it would save them much money now that rates were close to or already at peak.

Lendi chief operating officer Sebastian Watkins said there was a degree of exhaustion in the consumer mindset, when more than ever people should be looking at their financial options.

“What we’re seeing is people just giving up when now is the time … to actually be taking your case to a broker or to your bank because there is definitely savings out there,” he said.

“It’s not always as obvious as just taking a home loan and re­fin­ancing it – sometimes there’s some great relief that will come from things like consolidating a credit card or a car loan or personal loan into the home loan.”

Those who haven’t refinanced are paying a “loyalty tax” of 0.46 per cent by sticking with their current lender, and a homeowner on a $600,000 loan who refinanced now could save about $350 a month, according to analysis by the brokerage.

At the start of the year, the market was in a refinancing rush in the midst of rapid rate rises, with banks offering attractive cashback deals and bonuses to new customers.

Now household savings rates are at their lowest since the global financial crisis as cost-of-­living increases squeeze budgets, with those in the mortgage-belts of capital cities bearing the brunt of pain.

Sydney-based mortgage broker Leanne Johnstone has to chase clients in order to help them get ahead. “There aren’t as many coming to me now,” the Mortgage Choice Lane Cove principal said. “Every day you could be saving so much money if you do a quick check-in.”

The Reserve Bank is set to meet for the first time on Tuesday under new governor Michele Bullock, with most economists predicting another pause at 4.1 per cent, which would be the fourth in as many months.

AMP chief economist Shane Oliver believes the hiking cycle has peaked, with the RBA having done more than enough to stem inflation: “The combination of softening full-time jobs growth and a fall in job vacancies, real retail sales continuing to fall and an underlying trend in inflation remaining down against a background of tight monetary policy are consistent with the RBA remaining in ‘wait and see mode’.”