As the RBA leaves the cash rate on hold, new research has revealed the average home loan customer could save $82K by switching from a big four bank, to a low rate online lender.
Comparison site RateCity is urging home loan customers unhappy with the behaviour of our major banks to shop around.
New calculations show a family with a $350K loan looking for a fully-featured mortgage, could save up to $82,118 over the life of their loan, by going with the lowest comparable online lender, instead of a major bank.
RateCity spokesperson Sally Tindall said the only way to give the majors a wake-up call is to vote with your feet.
“The big four banks have an incredible 75 per cent share of the home loan market. If you’re fed up with what’s coming out of the Royal Commission, now could be the time to switch.
“Online lenders are increasingly putting fully-featured loan products on the table – at significantly lower rates,” she said.
For example, the big four advertise fully-featured loans for about 4.5 percent, along with a hefty package fee of $395 a year, while some of the smaller lenders are offering fully-flexible loans for as little as 3.49 per cent, complete with a 100 per cent offset account and no ongoing fees.
Online lenders facts
- Around 30% of lenders in the RateCity database are online.
- Australia’s fifth largest home loan lender is online only (ING).
- Nine of the 10 lowest rate lenders in our database are online lenders.
Tips for selecting an online lender
- Use a comparison tools, such as RateCity’s home loan comparison table, to research online lenders including ratings for each product.
- Find out what services they offer to field customer enquiries.
- Test out their call centre and online chat service.
- Read online reviews of the lender, particularly any social media feedback they’ve received.
- Make sure they have a comprehensive website, that’s easy to use. If they bury things like fees and charges, it could be a red flag.