Home loan refinance: Borrowers trust mortgage brokers over banks

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on January 20, 2021
Home loan refinance: Borrowers trust mortgage brokers over banks

Borrowers believe banks don't have their best interests at heart when it comes to refinancing.

With interest rates on home loans falling to record lows, Australians aren't wasting any time in refinancing.

A recent survey from Mortgage Choice found that two in five (38%) of homeowners are either in the process of refinancing or are considering it.

However, the research found over half (53%) of borrowers are skeptical about receiving unbiased advice from their bank when it comes time to refinance, and don't believe they would be advised if they could get a similar or better home loan deal elsewhere.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 2022. View disclaimer.

One in two (49%) homeowners believe banks don’t always have their best interests at heart, but on the flipside, 94% of borrowers say they trust the home loan recommendations made by a mortgage broker.

Mortgage Choice CEO Susan Mitchell says many borrowers find refinancing overwhelming and want an unbiased opinion they can trust.

“Faced with what can be an overwhelming choice of home loans, homeowners want to be confident they are making the move to a loan that will improve their financial wellbeing through a lower rate, improved loan features, or both," Ms Mitchell said.

“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.”

See also: 9 things to look for in a mortgage broker

For over half (55%) of those surveyed, the biggest benefit of using a mortgage broker when refinancing is the professional support comparing home loan options, rates and features.

Meanwhile, 45% said a mortgage broker streamlines the process, "saving time and hassle".

In February last year, the Australian Securities and Investment Commission (ASIC) issued guidance on new 'best interests duty' obligations for mortgage brokers following a recommendation made by Commissioner Kenneth Hayne in the banking royal commission to ensure brokers do the right thing by customers.

The new rules were aimed at stamping out some mortgage brokers from pushing borrowers into taking out unsuitable loans or encouraging them to go with credit providers who pay the mortgage broker a fatter commission.

At the time, ASIC Commissioner Sean Hughes said the new rules would remove any potential for conflicts of interest and ensure the interests of the borrower were looked after.

"The obligations properly align the interests of mortgage brokers with the interests and expectations of their clients - the borrowers," Mr Hughes said. 

"Consumers should feel confident that their broker is offering the best loan for their circumstances and we expect that consumer outcomes will improve as a result of this reform."


Photo by mentatdgt from Pexels

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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