Exercise caution 'over loyalty discount home loans'
People planning on buying a property who are intending to use a loyalty discount home loan have been advised to exercise caution before choosing this option.
Chief executive officer of home loan specialist Resi Lisa Montgomery told the Age that steep rises in interest rates are likely to leave borrowers feeling the pinch.
However, she explained that this is the reason why there are so many of the deals coming on to the market.
She said borrowers need to do quite a lot of research into all aspects of the loan first to determine if they are going to be a good option for them.
"If you're driven by other things, like fees and good service, then it shouldn't be just that loyalty reward which is holding you there," Ms Montgomery said.
Recently, Philip Chronican, the chief executive of ANZ's Australian operations, expressed his concerns over the number of people who had fallen into arrears on their mortgages.