Is your home loan best for you OR your bank?
The Australian Competition & Consumer Commission (ACCC) launched an investigation into the mortgage pricing decisions of Australia’s big four banks. According to their final report, released in December 2018^, 70% of recent borrowers only obtain one quote before taking out a mortgage.
Here is a great recent example…
- Client was on a rate of 4.85% (mortgage = $785,000) with a big four bank. They had been with the bank for 16 years and assumed they were getting a good deal for their loyalty but really didn’t have any idea what their rate was. They just kept paying the mortgage
- They were at a bbq when a friend mentioned they just refinanced their loan for renovations at a rate of 3.75%. You can imagine what happened after that.
- We spoke to their bank who would only reduce their loan to 4.25%, still a saving of $4,700 per annum
- The client wasn’t thrilled so we looked into the market and found them a rate of 3.55% with a non Big 4 bank …. a total saving of $9,400 pa….YES, $9,400pa
- Same product – Basic variable with redraw, no bells and whistles required
END RESULT – They decided to keep their repayments the same, which will reduce their home loan by 8 years and save $150,000 interest (see calculator attached).
It only takes a phone call, sms, email to get a home loan health check BUT could save you thousands OR you can keep adding to your banks profit. Its really up to you…
^ Australian Competition & Consumer Commission, Residential mortgage price inquiry – Final Report, 11 December, 2018.
Contact Boss Money to get your free home loan heath check
0476 111 000