Home loan borrowers are being advised by everyone from the Reserve Bank governor down to negotiate a better rate with their lender or refinance, but comparison site Mozo estimates that a significant proportion of borrowers are “mortgage prisoners” with no room to negotiate.
A consumer survey conducted by Mozo found 16 per cent of people on repayment deferral arrangements have had a pay cut this year, while others lost their jobs.
On top of that, house prices have fallen in five of the past six months, leaving some recent borrowers with lower loan-to-valuation ratios.
All up, Mozo estimates that 45 per cent of home loan borrowers are not able to negotiate with their lenders due to a combination of these factors.
Mozo also found that about 10 per cent of borrowers did not shop around when they were getting their home loan, so they are unlikely to be paying anywhere near the best rate in the market.