Australians spend more time researching phone plans than home loans
Buying a house is one of the largest financial commitments most Australians will make, yet new research reveals that we do more due diligence when choosing a mobile phone plan than a home loan.
Pepper Money, a non-bank lender, commissioned research that found more than half (53%) of Australians took the first home loan they were approved for.
When asked why, they found that 25% were worried about their application being rejected if they applied elsewhere, 32% believed that researching their other options would take too long, and a further 34% were simply relieved to have had their application approved in the first place.
According to Pepper Money’s report, there is a disparity in customers’ financial decision-making when comparing the way they choose their home loan with other products.
Only 61% of those surveyed said they are likely to take the time to research their options before deciding on a home loan lender.
In contrast, 71% said they’d research their mobile phone plan options and 70% said the same for their broadband plans – despite significant differences in both cost and the length of the commitment.
So, why aren’t all Australians doing their research on the home loan options that are out there?
Home loan customers overwhelmed with choice
Pepper Money chief executive, Mario Rehayem, believes customers are overwhelmed with the amount of home loan products on the market.
“The finance market has so many different lenders and variables that it can feel confusing to navigate, but taking the extra time to find the best option for your circumstances can make a much bigger real-life difference to the household budget than your choice of phone plan,” he said.
It’s the classic problem that an overabundance of choice can provide: fear of making the wrong choice, and regret of missing out on the (potentially) ‘better’ option.
Of course, having plenty of choices isn’t always a bad thing. It can just make it harder to land on a final decision.
While it may seem daunting to be confronted with a wall of logos, text, interest rates, and numbers, there are ways to make the process of researching the options a little smoother.
Before you dive in head-first to compare home loans, take some time to learn about the different features that are generally available. By figuring out what might work for you and your circumstances, you’ll be able to narrow down your options more easily.
Rushing into financial decisions can lead to regret
Nearly 4 in 5 (78%) of the Pepper survey respondents said that they had felt regret resulting from a financial decision in their past, with 71% admitting that looking at other options would have helped them to make a better choice.
With the financial scope of a home loan being what it is (which, for many, is huge), there appears to be a lot of pressure to get it right on the first go. However, with the ability to refinance your home loan, customers need not treat their existing mortgage like a bad tattoo - which is to say, they can make a revision!
Plus, there are plenty of refinancing cashback offers available at the moment, with ubank’s cashback offer topping $6,000.