A new series of mortgage discounts in Australia will likely cut up to A$4000 from yearly interest payments on the average mortgage.
Ubank, an internet-based subsidiary of the National Australia Bank (NAB), will offer a standard variable rate mortgage over one percentage point below NAB’s advertised rate.
This follows Commonwealth Bank’s no-fee loan, with a rate of about half a percentage point below the bank’s variable rate in February.
Under Ubank’s new 6.59 percent variable rate mortgage, a customer paying the highest standard variable rate of approximately A$300,000 will likely save A$318 a month or A$3,810 a year.
Meanwhile, a customer paying a A$400,000 mortgage will see his interest bill slashed by A$423 a month or A$5,080 annually, while a A$500,000 loan will decline by A$529 a month or A$6,350 a year.
“’Discounted internet products are absolutely something I would consider. The biggest challenge for me is the constant battle with rate changes,” said Ibrahim Kasif, who has a A$330,000 mortgage on his two-bedroom unit in Stanmore, a suburb in Sydney. His mortgage payment reached A$2010 a month, under Commonwealth Bank’s variable interest rate of 7.11 percent.
“Saving close to A$150 a month is appealing and would definitely make things easier for (a) week-to-week lifestyle,” he said. “’There are times when it feels like you are going blow for blow with paying interest and it can be a strain, with constant rate speculation.”
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