New South Wales property buyers will be the biggest beneficiaries if rates continue to fall in 2014, according to one of Australia’s largest comparison websites.
Michelle Hutchison, money expert at finder.com.au, said even though the Reserve Bank of Australia (RBA) has kept the official cash rate on hold, interest rates could continue to fall this year.
Borrowers in NSW have the biggest loan size on average compared to other states, and would save more money on their home loans if interest rates were cut, she said.
According to Australian Bureau of Statistics (ABS) data analysed by finder.com.au, the national average home loan has grown by 6.4 per cent to $319,200 from November 2011 to November 2013. The average home loan in NSW is the highest across the country at $358,800, an increase of 10 per cent over the past two years.
In addition, the average variable rate on finder.com.au has dropped by 0.5 per cent to sit at 5.34 per cent per annum. NSW borrowers could thus save more money than borrowers from any other state – $110 per month, according to Ms Hutchison.
“Regardless of whether there is no change from the Reserve Bank, homebuyers should compare home loans in the market as they can save significantly,” she said.
“For instance, variable home loans on finder.com.au range from 4.49 per cent and go as high as 7.05 per cent.
“Don’t get caught up in rate cuts because it’s the actual interest rate that matters. There are currently 33 variable rate loans under five per cent, so it’s more important than ever to make sure you compare home loans regularly this year.”
The finder.com.au monthly RBA survey of nine of Australia’s leading economists revealed they unanimously expect no change to the cash rate today.