Aussie home-buyers are shying away the traditional bank or broker model, and it’s getting great results.
While mortgage platform Lendi allows Aussies to run their borrowing or refinancing needs by experts, its latest Home Loan Index shows that actually, in the three months to 30 September, 80.3 per cent settled their home loan on the platform without the need for a face to face meeting with a mortgage broker.
“[Instead] there’s a seismic shift towards digital ecosystems,” Lendi co-founder and manager director, David Hyman said.
Greater choice, the ability to quickly compare loans and do that all at home are major boons, he explained.
“Many consumers don’t realise they have so many options at their fingertips.”
The Lendi research found that the economic payoff of increased access to home loan resources is also huge, with borrowers inclined to make more financially responsible decisions.
Refinancing also in the spotlight
The ability to refinance online is also a major bonus.
The average owner occupier refinancing in 2018 is set to save an average $2,198 a year thanks to a 0.48 per cent interest rate deduction – that’s $65,000 over the life of a 30-year home loan, Lendi’s figures showed.
“Lenders offer irresistibly low rates to attract new customers but existing ones aren’t rewarded for loyalty. It pays to do a bit of research and negotiate with your lender to ensure your mortgage is working hard for you,” Hyman noted.
Mortgage market meltdown
The findings come as Australians grapple with an increasingly tricky mortgage market.
National Australia Bank this week raised its interest rates for new borrowers from 3.69 per cent to 3.87 per cent, following the other three major banks’ moves nearly two months ago.
“Over the last six months NAB has been a champion of competitive pricing, forcing other lenders to put low rates on the table. This decision sees them pull up stumps in the low-rate market, which is disappointing,” research director at comparison site, RateCity, Sally Tindall said yesterday.
However, she added that it is rare to see a bank protect existing customers from rate hikes.
“NAB is clearly focused on backing its own customers, over potential new ones,” she said.
At the same time, property experts’ predictions are growing increasingly dire, with finder.com.au yesterday predicting apartment owners will see 8 per cent wiped off their home’s value by the end of next year.
Morgan Stanley also considers Australia’s household debt to be among the most risky in the world, with our household debt to GDP ratio teetering at 120 per cent.
With these factors in mind, all eyes will be on the Reserve Bank of Australia as it hands down its rate verdict for November 2018 at 2:30pm.
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