Borrowers in some suburbs of Australia's major capital cities are paying much higher interest on their mortgages than others, claims an online mortgage company.
HashChing, an online mortgage marketplace, says it analysed over 1,000 mortgage applications between December 2016 and January 2017 and found out homeowners in some suburbs were, in some suburbs, forking out almost double in interest payments than what’s the average.
The company claims homeowners in Melbourne suburbs of Blackburn, Glen Waverley, South Morang, Mernda, Narre Warren and Cranbourne were paying up to 7.04 percent interest while the interest rate in Melbourne is 4.46 per cent.
In Sydney where the average interest rate is 4.46 per cent, homeowners in The Ponds, Doonside, Quakers Hill, Campbelltown and Stanhope Gardens are paying up to 7.88 per cent.
Queenslanders are paying off interest rates as much as 7.39 per cent in Coomera, Advancetown, Austinville, Labrador, Surfers Paradise, Brendale and Springbrook. By comparison, the average interest rate in the Queensland capital of Brisbane is 4.72 per cent.
HashChing CEO Mandeep Sodhi said the reason for higher interest rate payments is that these suburbs have large self-employed homeowners who were deemed riskier due to their unstable income.
Mandeep Sodhi with co-founder of HashChing, Atul Narang. Source: Supplied
“The market has changed and banks have become more amenable to offering a competitive interest rate to these customers,” said Mr Sodhi.
He said an average self-employed borrower could be paying additional $87,383 over the life of a $500,000 loan as they were found to be paying as much as 1 per cent higher interest than the salaried borrowers.
He advises borrowers repaying their loan regularly to shop for competitive interest rates.
“Borrowers who have been making their minimum monthly mortgage repayments on time for the last 12 months are in a strong position to demand a better interest rate from their current lender. Alternatively, they can switch to a lender that offers them a better rate,” said Mr Sodhi.
