New federal laws 'will make it easier to compare home loans'

The recent creation of new federal consumer protection legislation will make it easier for Australians to compare home loans, an expert has predicted.

Lisa Montgomery, head of consumer advocacy at Resi Mortgage Corporation, noted that the establishment of consumer credit protection legislation last month will mean that lenders will have to ensure they do not present customers with “unsuitable’’ loan products.

“That means they will now have to ask you plenty of questions to find out what type of products will suit your particular requirements,” she told the Courier-Mail.

Ms Montgomery also advised mortgage buyers to do their own research, adding that the lowest possible home loan interest rate will not necessarily signify the best possible home loan.

She observed that some loans that come with higher interest rates may also offer greater flexibility that over the course of the loan could result in a cheaper outcome.

According to recent Australian Bureau of Statistics data, housing finance commitments for owner-occupied housing fell 3.9 per cent in June – a drop of almost twice the market forecast.

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