HOMEOWNERS in some of Queensland’s battler suburbs are forking out up to $115 more a week on their mortgage than those in a number of Brisbane’s blue chip pockets, new research shows.
HashChing and Digital Finance Analytics have crunched the numbers using recent home loan settlement data and it reveals a huge discrepancy in mortgage rates across the state’s southeast.
According to the research, some borrowers in lower socio-economic and rural/residential suburbs are paying as much as $102,081 more over the life of an average $375,000 loan than homeowners in more affluent areas, in what has been described as a “worrying” trend.
Struggling families in the suburbs of Ningi, Shailer Park and Deception Bay are paying interest rates as high as 5.29 per cent, while savvy borrowers in Pullenvale, Brookfield and Fig Tree Pocket are paying as little as 3.69 per cent interest on their mortgage.
The research shows households in Redland Bay and Victoria Point are paying the highest rates in the state — up to 6.74 per cent.
The research looked at more than 600 new or refinanced loans settled through HashChing brokers between March and October.
The research looked at more than 600 new or refinanced loans settled through HashChing brokers between March and October and based on an average loan of $375,000.
HashChing chief executive Mandeep Sodhi said the differences in repayments across Queensland came down to a number of factors, but those paying the highest rates were typically self-employed, held multiple credit cards and had a deposit of less than 20 per cent.
Mr Sodhi said it meant consumers needed to be more proactive when researching home loans.
“Interest rates are dependent on a range of things, from an individual’s credit-rating and the type of loan they are after, to whether the borrower is self-employed, the loan to value ratio and who the lender is,” Mr Sodhi said.
“What’s worrying is that the data suggests lower socio-economic areas are actually paying higher interest rates.
“This indicates that this class of borrower might require more support when comparing rates, negotiating with lenders and navigating around issues like a bad credit history.”
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Digital Finance Analytics principal Martin North said he was surprised to see some of the more affluent households — often with bigger mortgages and therefore riskier to lenders — were the ones paying the lowest rates.
“Our modelling shows it’s not necessarily the groups you’d think would be most impacted,” he said.
“It’s the more affluent households, particularly young affluent households with a big mortgage, who are highly sensitive to rises in interest rates — many of whom have interest only loans.
“The typical borrower on the urban fringe usually has a smaller mortgage.”
Mr North said the results highlighted the importance of shopping around and renegotiating a better rate.
“There might be some different conditions such as risk profile or loan to value ratio affecting the interest rate, but it looks more to do with the pricing power of individual lenders and the negotiating power of individual borrowers as to what rate they actually get,” he said.
“The fact is the neighbour down the road could be on a far better deal than you.”
It comes as lenders are falling over themselves to offer home loan deals to owner occupiers amid signs of a slowing property market.
Thirty lenders cut their rates for owner occupiers in October, according to financial comparison website Mozo, and 70 lenders are offering a headline rate of less than 4 per cent for owner occupiers paying off principal and interest.
The competition comes after bank regulator APRA moved to direct lending away from investors, riskier borrowers and interest-only loans.
But a recent Galaxy Research study commissioned by comparison site iSelect revealed more than half of all mortgage holders are still paying an interest rate of 4 per cent or more and 13 per cent were paying over 5 per cent.
“Basically, if your interest rate doesn’t start with a three, you are paying too much,” iSelect spokeswoman Laura Crowden said.
“Homeowners who are currently paying above four per cent should take advantage of the current low rate environment and move to a better deal before the RBA makes a move against them.”
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Brisbane’s Marian Moffatt recently took the plunge and changed lenders, saving herself about $40 a month by refinancing her mortgage.
The 38-year-old had been with the same lender since buying her home in Zillmere eight years ago and has gone from paying 3.89 per cent interest to 3.78 per cent.
Ms Moffatt said she was surprised how easy it was to switch lenders and negotiate a better deal.
“It doesn’t pay to be loyal to a bank because they don’t show any loyalty to long-term customers,” she said.
“They’re only interested in getting new ones.”
SNAPSHOT OF QUEENSLAND MORTGAGE RATES
Suburb Average rate Highest rate Lowest rate Average loan
Ningi/Sandstone Point 5.29% 5.29% 5.29% $291,000
Redland Bay/Victoria Point 5.26% 6.74% 3.78% $363,000
Shailer Park 4.19% 4.19% 4.19% $290,000
Deception Bay 4.13% 4.53% 3.88% $254,000
Helensvale/Hope Island 4.10% 4.20% 3.99% $402,000
Amberley/Willowbank 4.06% 4.31% 3.80% $378,000
Eight Mile Plains/Runcorn 4.01% 4.39% 3.78% $264,000
Nerang/Carrara 3.99% 4.19% 3.85% $385,000
South Brisbane/Highgate Hill 3.99% 3.99% 3.99% $264,000
Springfield 3.93% 4.03% 3.74% $416,500
Tamborine 3.87% 3.99% 3.74% $285,000
Burpengary 3.84% 3.93% 3.74% $603,500
Coomera 3.79% 3.84% 3.74% $395,000
Zillmere/Aspley/Boondall 3.78% 3.78% 3.78% $310,000
Anstead 3.74% 3.74% 3.74% $417,000
Bribie Island 3.74% 3.74% 3.74% $460,000
Caloundra 3.74% 3.74% 3.74% $379,000
Montville/Mapleton 3.69% 3.69% 3.69% $332,389
Ipswich 3.69% 3.69% 3.69% $318,800
Fig Tree Pocket/Pullenvale 3.69% 3.69% 3.69% $589,600
Mount Gravatt 3.68% 3.68% 3.68% $405,000
(Source: HashChing, Digital Finance Analytics)