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Switching home loans could save you up to $3000 a year.
AUSTRALIANS are a nation of “misguided†savers who pinch pennies but are too lazy to find a better deal on major life purchases that could save them up to $3000 a year, a study has found.
According to the report by the University of Technology Sydney, Australians are wasting an estimated $7.4 billion a year by focusing on minor savings purchases such as their weekly shop, rather than major life purchases such as their home loan.
Three quarters of Australians (76 per cent) described themselves as “tightwads†who limit their spending, but the biggest priorities for savings were travel (95 per cent), fashion (93 per cent) and food (90 per cent).
But while more than two thirds (67 per cent) of Australians recognised the importance of getting a good deal on their home loan, only a third of people had actually switched providers.
Nearly 30 per cent thought it was not worth the time and effort, but according to UTS, those who did switch saved up to $3000 per year.
“‘Tightwads’ are more likely to switch providers in more categories, but they switch in categories that are more instant gratification like clothing and food,†said UTS researcher Dr Eugene Chan.
“They are actually less likely to switch in more major categories such as credit cards and home loans, or major investments. The reason is the perceived time and effort. They care about their money but the effort [to switch] is a significant barrier.â€
Ironically, the Australians classed as “spendthrifts†were less likely to hold back on minor purchases but more likely to seek out a better deal on their major service providers. “These people care less about putting in the time and effort,†Dr Chan said.
“They really don’t mind looking at all the different bank websites for home loans. They don’t see it as a barrier, but ‘tightwads’ do.â€
But the study found more Australians were shopping around for a better deal on their banking, insurance, grocery and utilities providers since last year, with 55 per cent having ditched their current service provider for a better deal.
The study, commissioned by Heritage Bank, found simply switching providers could net consumers minimum savings of $750 on home loans, $186 for credit cards, $296 for groceries, $149 for energy, $81 for internet and $88 for mobile phones.
“Even though consumers think they’re looking for the best deals, they tend to focus on travel, fashion and food, which aren’t necessarily areas were they’re going to get the best deal,†said Heritage Bank general marketing manager Jane Calder said.