What does home loan competition mean for you?

October 16, 2016
Linda Coates

Anyone thinking about their current home or investment loan may be wondering what's been happening with interest rates. The most common question is why their lender is offering new customers a much lower interest rate than existing customer have - for the same loan! Customers are wondering "what ever happened to loyalty?". 

The reason is quite simply competition. More than 50% of home loans are now being originated by a mortgage broker, where an uncompetitive lender is very obvious.

Three or four years ago banks were typically giving people discounts of 0.7% off a "standard variable rate" loan. 

To win business now they have gradually increased the discounts to about twice the usual amount, to 1.40% and sometimes more. This represents a huge potential saving to borrowers if they can take advantage of it. Saving 0.7% on a $300,000 loan can put $2,100 per year back into the borrower's pocket - and most people would be happy with that.

We've been actively engaging our customers to take advantage of these discounts. We ask the current lender first. Leaving it to us gets the best results because we know their competition. However, they won't always look after existing customers. Some lenders are more helpful. 

If there's no success negotiating with the existing lender. We identify a lender that really wants your business and arrange all the paperwork so refinance your loan. We also outline all the costs and savings so the benefit of changing is transparent - we also estimate how much money will be in your pocket.
It will be interesting to see what happens in a few years - if competition lessens for any reason banks might only offer 0.7% discounts again while customers who have obtained a great interest rate discount now can bask in the glory of having a rate that no new customer can get! 
The reason to call us is clear - let us save you money while the opportunity is available!
Posted in: Interest rates

Contact us today.

Additional Comments? * :