HOMEOWNERS in Upper Coomera could save themselves thousands of dollars by refinancing their home loans to a lower rate, new research reveals.
The Gold Coast suburb is the city’s only suburb to make the top 20 ‘mortgage belt’ suburbs in Queensland where buyers can save big dollars by refinancing.
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The research, commissioned by Reduce Home Loans, assumed homeowners bought in 2019 with a 10 per cent deposit and were refinancing from 4.75 per cent down to 3 per cent.
Upper Coomera came in fourth with 3977 mortgages in the suburb.
The report found borrowers could save as much as $138,498 if they refinanced down to a 3 per cent rate.
Queensland’s top three suburbs included Forest Lake, Narangba and Jimboomba.
Reduce Home Loans general manager Josh Beitz said the research was timely given that a host of borrowers had either recently come to the end of a two-year or three-year fixed-loan term, or will do so shortly.
The report found Upper Coomera homeowners could save as much as $138,498 if they refinanced down to a 3 per cent rate. Picture: Jerad Williams
“Some borrowers who have reverted, or will soon revert, from a fixed to a variable loan might find themselves on a higher interest rate, which, of course, would be concerning.
“It’s important for those borrowers that can afford the rollover rate not to be complacent. “That’s because the Reserve Bank is likely to keep increasing the cash rate, which will translate into much higher mortgage rates.
“Lenders always assess borrowers at higher interest rates, so as rates keep increasing, people’s borrowing power will be reduced.
Refinancing now could potentially add up to a saving of tens of thousands or even hundreds of thousands of dollars over the life of the loan.
He said as a result, many borrowers would be locked out of refinancing.
“That’s why borrowers should seriously consider refinancing now to a comparable loan with a lower interest rate – because as rates keep increasing, borrowers can become ‘mortgage prisoners’ unable to escape spiralling interest rates.
“The interest rate gap between higher-rate and lower-rate loans is already large, and is likely to keep growing as interest rates keep increasing.
“So refinancing now could potentially add up to a saving of tens of thousands or even hundreds of thousands of dollars over the life of the loan.
Refinancing might make the difference to some people being able to keep their home or being forced to sell it.
Mr Beitz said refinancing might make the difference to some people being able to keep their home or being forced to sell it in a depressed market.
“All the suburbs on this ranking are showing life-of-loan savings of at least $75,000,” he said.
“That’s based on the assumption that borrowers have 27 years left on their mortgage and would be refinancing from an interest rate of 4.75 pre cent to 3.00 per cent.
“It goes to show how powerful refinancing can be.”
Top 20 ranking
1. Forest Lake
2. Narangba
3. Jimboomba
4. Upper Coomera
5. Buderim
6. Caboolture
7. Thornlands
8. North Lakes
9. Morayfield
10. Redland Bay
11. Kirwan
12. Alexandra Hills
13. The Gap
14. Helensvale
15. Kallangur
16. Bracken Ridge
17. Capalaba
18. Emerald
19. Albany Creek
20. Springfield Lakes
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