Many homeowners wary of banks when refinancing

Research commissioned by Mortgage Choice confirms some Australian homeowners are sceptical about receiving unbiased advice from a bank when it comes to refinancing a home loan.

Not the full picture: Banks won’t mention competitors’ deals

As mortgage interest rates hit record lows, Australians are wasting no time securing the best possible home loan deal.

The research reveals two out of five (38 per cent) homeowners are either in the process of refinancing or are considering making the move to a new loan. However, 53 per cent of homeowners are wary that if they speak to a bank, they won’t be advised if they could get a similar or better home loan deal elsewhere.

One in two (49 per cent) homeowners feel that banks don’t always have their best interests at heart.

High levels of trust for mortgage brokers

The survey results confirmed a significant majority (94 per cent) of Australian homeowners say they trust the loan recommendations made by a mortgage broker.

For half (55 per cent) of the respondents surveyed, the number one benefit of partnering with a mortgage broker during the refinancing process is professional support comparing loan options, rates and features.

For 45 per cent of refinancers, a mortgage broker streamlines the process, “saving time and hassle”.

Mortgage Choice chief executive officer Susan Mitchell said that when faced with what can be an overwhelming choice of home loans, homeowners wanted to be confident they were making the move to a loan that would improve their financial wellbeing through a lower rate, improved loan features, or both.

“While banks can provide information on their own product suite, they do not have an in-depth understanding of competitors’ products.

“That is why I urge borrowers in the market for a better deal to engage the help of an experienced mortgage broker to learn what other options they have.

“Mortgage brokers not only provide a broad selection of loans across a variety of lenders, they also take the time to explain why a particular loan is being recommended.

“This is very reassuring for consumers and demonstrates that mortgage brokers work in the homeowners’ best interests at all times. This important combination underpins the exceptional level of trust that homeowners place in their mortgage broker.”

The Mortgage Choice research is based on research commissioned by Mortgage Choice and conducted by CoreData between October 14-27, 2020.