A survey conducted on home loan rates being paid by self-employed people reveals that on average, they pay between 5.5% to 6% per annum, and sometimes even 8%, adding thousands of dollars of debt on the life of the mortgage.
The survey looked at mortgage repayments of 1,000 self employed people around Australia. It was conducted by online mortgage marketplace Hashching and founders Mandeep Sodhi and Atul Narang told SBS Punjabi that "most self-employed people mistakenly believe that they can't get home loans below 4% interest rates, because of which they don't ever renegotiate their existing home loan rates."
"If your income is consistent, your repayments reach the bank regularly, and you have a good credit rating, then there is every reason for you to renegotiate your home loan rate with your bank and settle on a lower repayment rate", says Atul Narang.
"Most self-employed people feel that because their income may fluctuate and their financial records may not be as clear as of PAYG home buyers, they may have to live with higher interest rates, but that's not true".
Mandeep Sodhi says, "some years ago, even I renegotiated my existing home loan with my bank and saved 0.15% off my home loan rate. That was a substantial saving for me. Considering that people are paying upto 8% interest rates at the moment, if they can renegotiate to even 1% lower rate, then they will be saving $80,000 over the life of their home loan".
