Australians are ready to switch banks.
Article by Kevin Boyle
Over half of Australian home loan owners say they would consider ditching their current lender if another bank offered them a 50 point basis discount on their home loan.
The recent CUA National Mortgage Survey revealed that 56% of borrowers would consider refinancing if they received a 50 basis point discount on their current rate, while 30% said they would definitely make the switch.
"Overall, Australian mortgage holders are looking for a lender that provides competitive rates and makes decisions that are in the customers best interest," says CUA general manager for products and marketing Jason Murray.
Mozo's comparison calculator showed just why it would be worthwhile for borrowers to make the switch. Paying back an average loan of $300,000 over 25 years would make a saving of $91 a month or $27,192 over the lifetime of the home loan.
The survey also revealed a high level of discontent amongst Big Four customers, where 60% admitted that they would give their bank the flick for a discount of just 25 basis points. 70% of borrowers indicated they would also make the switch for lower fees and charges.
However the biggest warning to Australian banks was that 78% of all mortgage holders surveyed would be tempted to switch to another bank if their current lender failed to adjust their rates in line with the Reserve Bank's interest rate cuts. Mozo's database shows that only 7 out of 92 home loan lenders passed on a full rate cut to their customers after the RBA's last cut.
CUA's survey also revealed that despite fixed interest rates being at all time lows, only 7% of borrowers planned to move to a fixed rate in the next 3 months.
Homeowners ready to make the switch and significantly reduce their home loan repayments may find some exciting results by giving their mortgage a home loan health check.
Have a question about home loans? Ask the gurus at Mozo Answers.