The cost of dealing with a major bank
If you are a home loan customer with one of the dozens of smaller second tier lenders in Australia then you may already know what I am about to say.
If your home or investment loans are with ANZ, Commonwealth Bank, National Australia Bank, St George or Westpac, then it is likely you are paying a premium for the privilege of being with one of the Big Banks.
Before I begin, let me preface by saying that not all lenders are suitable for all borrowers, and it is important to get qualified credit advice to ensure a lender meets your specific circumstances.
In the current market we are seeing a significant swing in client applications away from the major banks. Here is some context to put this into perspective.
In May this year – before the last round of ASIC intervention – almost 85% of our new loan applications went to one of the major banks listed above.
This compares with only 42% of new loan application going to these major banks last month (August).
That is a huge swing in anyone’s language. And there is a simple explanation; Borrowing from a smaller lender will save you money in the current lending landscape.
When we talk about smaller lenders we are not talking about some obscure lender who no-one has ever heard of before.
Some of the lenders we are seeing more clients go to include AMP, ING, Suncorp, ME Bank, Resimac, Bank of Queensland, Qudos and Heritage Bank.
The savings we are talking about are not small either.
It is common to see savings of over 0.50% for some of these lenders to the nearest major bank. On a $700,000 home loan that equates to a saving of $3,500 each year, or up to $17,500 over a 5 year period!
That is the cost you pay to be with one of our major banks in today’s market. And for many, it just does not add up.
We are offering our clients a fast, obligation free review of their current loans to see if they too could be saving money on their property loans.
We are extending this opportunity to anyone with a home loan, so if you would like a market comparison for your current home loans call one of our offices or email your current home loan statements to firstname.lastname@example.org and we can calculate your potential savings today.