3 minute read
Finding value for your dollar
For the first time in a long time, the cost of living in Australia is a hot topic.
Reserve Bank of Australia Governor Phillip Lowe made note of this in a recent release, remarking that “after many years in which inflation was something that most people didn’t think too much about, it is now a topic of everyday conversation.”
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And unfortunately, the outlook ahead does not appear to be bright, with Treasurer Jim Chalmers forecasting testing times in coming months, ahead of expected further rises in inflation.
The impact on consumers
The effects are being felt nationwide – with the current economic climate now forcing consumers to evaluate their day-to-day expenditure, explains iSelect spokesperson Sophie Ryan.
“Aussies are experiencing price hikes across the board, from groceries and petrol to electricity prices and interest rates.
“Every dollar counts in these tough times, which is why it’s so important to make sure you’re not paying more than you need to when it comes to household bills and expenses.”
Prime time for refinancing
One area that consumers are seeking to secure more bang for their buck is on their home loan. This is a trend that has been confirmed by PEXA Insights’ Refinance Index, an online metric which quantifies market performance.
The index reached a record high at the start of July, as volumes remain strong after a bumper FY22.
And as Ryan notes, “with interest rates increasing, the home loan you previously signed up for may not be the best fit for you today. There could be more competitive interest rates out there, which is why now could be a good time to shop around and consider refinancing.
“You may be able to find a lower premium with a different insurer or a home loan with lower repayments.
“Lendi data shows that homeowners are penalized with a ‘loyalty tax’ by remaining with their lender. By considering an alternative lender, Lendi data shows existing Owner Occupiers on Principal and Interest loans who refinance now could save a median of $1,643 annually.”
What to look for
When determining your next steps, Ryan notes that each case is different and it’s best to evaluate your circumstances in order to make the right move.
“If you’re thinking about refinancing, it’s important to be clear on your needs.
Whether you’re looking for additional features, such as an offset account or redraw facility, or perhaps you want a home loan that’s better suited to your current finances and lifestyle.
“Every home loan is different, so make sure you sit down and work out what you need first.”
