HSBC has released a ‘strong, low rate’ for owner-occupier mortgagors paying principal and interest in a bid to help customers refinance.
This week, the bank announced that it is “encouraging more home owners to switch loans” by offering a strong low rate of 3.65 per cent p.a. for owner-occupied principal and interest mortgage (3.66 per cent comparison rate).
According to the lender, which returned to the broker market earlier this year following a 10-year hiatus, the new rate has been brought out after an HSBC-commissioned survey found that a quarter of Australians do not know what their mortgage rate is and could potentially save money by refinancing.
HSBC suggested that those with a 4.0 per cent p.a. rate on a $700,0000 variable loan could save more than $40,000 over the life of the loan by switching to the bank's new low rate.
Nearly a third would visit a broker
As well as finding that 25 per cent of the 2,000 mortgagors surveyed did not know their rate, the RFi Group found that mortgagors looking to refinance were more likely to speak to a mortgage broker (30 per cent) than research rates themselves online (25 per cent).
Alice Del Vecchio, head of mortgages and third-party distribution at HSBC Australia, commented: “In our experience, customers who are experiencing major life milestones are the most likely to want to refinance their loan.
“Typically, customers who have recently acquired a mortgage are more sensitive to market changes, as are those looking to save for their children’s education, buy an investment property or start planning for retirement.”
Ms Del Vecchio added: “A 3.65 per cent p.a. rate, like the one we’re offering, can make a huge impact on the savings over the life of the loan, not to mention freeing up money in the short term with potentially lower repayments.”
She also said that customers should speak to their banks or visit a mortgage broker as they are the “experts in the market”.