1 in 2 Australians have never played the lender field

February 26, 2016
Rhye Livingstone

New data highlights financial preferences of banking customers

 

The majority of Australians have never changed or reviewed their financial institution, preferring to use the one lender for all of their needs.

According to Mortgage Choice’s Money Survey, 46% of respondents said they were ‘loyal’ to their financial institution and as such, had not seen the need to switch institutions or have a relationship with multiple lenders.

Speaking about the results, local Mortgage Choice franchise owner Rhye Livingstone said while there is nothing wrong with being loyal to the one banking institution, it is important for Australians to make sure the lender they choose to partner with is meeting all of their needs.

“Looking at the data, the number one reason why Australians switched lending institutions was because they could source a higher savings rate elsewhere. The second most popular reason for changing lenders was because Australians found a better home loan deal with another financial institution,” he said. 

“Both of these reasons are valid motives for changing lenders. Some Australians are acutely aware that there is another lender on the market that can offer them a better deal or rate that suits their needs.

“Those who decide to partner with a lender that perfectly suits their needs will find they reach their financial goals sooner.”

Mr Livingstone said it isn’t difficult for Australians to review and potentially change lending institutions.

“There are a few easy steps that all Australians can take to ensure they partner with the right financial institution,” he said.

Step 1: Know what you want from a lender

“All Australians have a unique set of financial needs and goals,” Mr Livingstone said.

“As such, it is important to partner with a lender that meets our unique needs. Of course, before we can choose the right lender, we need to know who we are and what we want from our financial lending institution.”

Those who are wanting to grow their savings and make their money work harder may need to look for an institution that offers a great high interest savings account product. Alternatively, mortgage holders may find there is more benefit in partnering with a lender that offers a sharp home loan package and interest rate.

“Regardless if you are looking for a lender with low home loan interest rates or one that allows you to take money out of any ATM in Australia and not be charged a fee, there will be a lender out there that meets your needs,” Mr Livingstone said.

Step 2: Do your research

Once you have identified what you want from your lender, Mr Livingstone said it is important to jump online and research which lenders can successfully meet your needs.

“There is a range of great comparison websites where you can see what each lender offers and compare them against others in the market,” he said.

Step 3: Read the fine print

When selecting a lender you want to partner with, Mr Livingstone said Australians should take extra time to read the fine print and make sure there are no hidden fees or charges.

“It is important to know exactly what you are getting yourself in for,” he said.

“If you are signing up to a new savings account, check the fine print and see whether or not there are any fees and charges associated with that particular product. For example, do you have to deposit a certain amount of money each month to avoid paying the account keeping fee?

“If you are looking to partner with a lender that offers free usage of any ATM in Australia, read the fine print and make sure there are no conditions on how much money you need to withdraw from the ATM each time you use it. The key is to go through your lender contract with a fine tooth comb and make sure there aren’t any hidden fees or charges you aren’t comfortable with.”

Step 4: Make a list of ‘need to know items’

In addition to reading the fine print, you may find you have some additional questions that you would like answers to. Before you sign up to the lender or product, make a list of everything you would like to know about the product.

“Once identified, you can drop into a branch or give your preferred lender a call and ask the burning questions you have listed,” Mr Livingstone said.

“This should provide you with the peace of mind you need to know you are making the right decision.”

Step 5: continue to review your needs

Even after you have done your research and decided upon a lender, it is important to continue to review your financial relationship on a regular basis.

“Australians shouldn’t take a set and forget attitude towards their finances,” Mr Livingstone said.

“It is important to be proactive when it comes to your finances and research your options regularly. As a general rule of thumb, it is a good idea to review your financial situation at least once a year or every time you make a significant financial decision – whatever comes first.”

For more information on retirement and/or your financial advice options, call 13 77 62. Or, visit www.mortgagechoice.com.au, Facebook.com/MortgageChoice or Twitter.com/MortgageChoice.

Table 1: Lender preferences

How often do you review and/or changed lending institutions?

National

NSW

VIC

QLD

SA

WA

I’ve never changed

46.0%

47.1%

45.0%

49.2%

49.0%

39.1%

I review my options on a regular basis (once or more a year)

12.8%

14.8%

12.5%

8.0%

12.9%

16.3%

I review my options on a semi-regular basis (every 2 – 5 years)

28.3%

26.2%

29.0%

30.3%

25.2%

31.2%

I review regularly and have a relationship with more than one financial institution

11.7%

10.5%

13.0%

9.5%

11.9%

12.9%

Other

1.2%

1.4%

0.5%

3.0%

1.0%

0.5%

 

 

Table 1: Switching decisions

For what reasons have you changed lending institutions in the past?

(multiple choice answer)

National

NSW

VIC

QLD

SA

WA

I refinanced my mortgage with a new lender

28.4%

30.6%

28.2%

27.5%

24.3%

31.7%

I was able to get a higher savings rate elsewhere

38.1%

30.6%

41.8%

35.3%

42.7%

38.2%

I was tired of my current lender and wanted a change

13.5%

17.1%

12.7%

12.7%

11.7%

13.0%

I had a bad experience

15.6%

12.6%

15.5%

22.5%

14.6%

13.0%

Another bank approached me with a better deal

18.7%

20.7%

19.1%

19.6%

19.4%

15.4%

Other

4.7%

6.3%

2.7%

2.9%

5.8%

4.9%

 

 

About the survey

Market research company TEG Rewards was commissioned by Mortgage Choice to conduct the 2016 Money Survey. The online survey was conducted in February 2016 and completed by 1,030 Australians.

 

Important information

This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.

 

About Mortgage Choice

Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.

Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.

Since that time, the company has grown and developed into a fully fledged financial services provider.

Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.

Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.

Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).

Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.

Recent recognition: 2014 Australian Broking Awards Best Diversification Program; 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education;   No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.

Visit www.mortgagechoice.com.au or call customer service on 13 77 62.

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