Many borrowers 'think all lenders are the same'

Monday 31 January 2011

Article by Mozo

Many Australian borrowers fail to compare home loans and switch to better deals because they mistakenly believe all lenders are the same, an expert has observed.

Many borrowers 'think all lenders are the same'

Paul Clitheroe, the founding director of financial planning firm ipac, referred to recent research which found that one in three home loan borrowers stick with their arrangements because they see no difference between the banks.

This is despite the fact that, according to research by ING DIRECT, less than half the country's homeowners are happy with their mortgage, he said.

Writing for the Rockhampton Morning Bulletin, Mr Clitheroe noted that although the basic way a mortgage works "is pretty much the same across the board", there are huge variations in interest rates and features among lenders that can lead to big savings if borrowers weigh up their options and refinance.

Elsewhere, the specialist also urged borrowers not to be put off by the issue of exit fees.

"Sure, these can be costly, especially if you've had your current mortgage for less than five years," he said.

"But many lenders have now scrapped exit fees, so it's worth contacting your lender to see if they still apply to your loan. Also, be aware that the federal government is planning to outlaw home loan exit fees from July 1st."

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