January 16, 2023
New research commissioned by Mortgage Choice has revealed that many Australian borrowers feel undervalued by their current lenders and will consider switching to a new lender if their loyalty isn’t rewarded. The research, conducted by Honeycomb Strategy, is based on a survey of more than 1,000 Australian home loan customers.
More than half (52%) said they either knew they weren’t receiving the best interest rate offered by their lender or they weren’t sure they were receiving the best rate available.
Mortgage Choice CEO Anthony Waldron said, “Unfortunately, many lenders don’t reward their customers for loyalty. In a rising rate environment, it pays to shop around for a better deal and not be complacent with your home loan.”
The research revealed that 71% of borrowers would be very likely or somewhat likely to switch lenders if they felt they were no longer getting the best rate available. However, 68% of respondents said they would prefer lenders to offer the same rates to new and existing customers so they didn’t need to switch lenders to secure a better rate.
“Borrowers are telling us they want pricing parity between new and existing customers,” said Mr Waldron. “They believe they should be rewarded for their proven repayment history and for choosing to stay with their current lender instead of switching.”
As interest rates continue to rise, the gap between interest rates paid by new and existing home loan customers is widening. While most lenders have been passing on the RBA’s interest rate increases in full to existing customers, many have been cutting their introductory rates to remain competitive.
Mr Waldron said, “Unless Australian lenders begin offering the same rates to new and existing customers rather than focusing on low introductory rates and cashback offers, it will pay to regularly review your home loan. Your broker can help you compare a wide range of products and lenders, and offer expert guidance on the best options for your situation. That way, you’ll know with certainty that you’re getting the best loan for your needs.”