CEO of Loan Market Group, Jennifer Nielsen, has urged borrowers to negotiate their interest rates, pending a decision by the Reserve Bank of Australia (RBA) in early September.
According to Nielsen, there was nothing to stop customers from taking control and being proactive about the rates they were paying, regardless of the action that the central bank would take.
"Amazingly, our mortgage brokers find that around six out of every 10 mortgage holders don't actually know what interest rate they are paying. And that means many are paying more than they need to," she said, adding that borrowers should take control and constantly seek the best deal from their bank.
"It is important for borrowers to keep assessing their position and ensure they are getting the best deal possible on their home loan," she said.
According to Nielsen, while switching lenders attracted costly exit fees, the market was competitive and banks were keen to keep existing customers. She said this left borrowers with the option of negotiating rates with their own bank first.
Nielsen further added that it was advisable to seek the help of a mortgage broker.
"A broker is best placed to advise clients on their options with major banks and a range of non-bank lenders," she said.
"They can assess the various deals on variable mortgage rates and advise on whether it's possible to get or move to a cheaper rate."
The RBA is expected to cut official rates by at least one quarter of a percentage point following its next board meeting on 2 September. However, so far only NAB and ANZ have committed to passing on any potential rate cut.
