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Commissioned by aggregator Mortgage Choice and conducted by Honeycomb Strategy, the new research was based on over 1,000 responses from Australian home loan customers. The survey found that a large number of borrowers felt “undervalued” by their current lenders and will consider switching to a new lender if their loyalty remains unrewarded.
The research found that 71 per cent of borrowers would be “very likely” or “somewhat likely” to change lenders if they felt that they weren’t receiving the best possible interest rates.
Over half of the respondents (52 per cent) said they knew they weren’t receiving the best interest rate offered by their current lender or weren’t sure they were getting the best rate available.
A further 68 per cent of respondents said they would prefer lenders to offer the same rates to new and existing customers, doing away with the need to switch lenders for a better rate.
Mortgage Choice CEO Anthony Waldron said many lenders, unfortunately, do not reward their customers for their loyalty.
“In a rising rate environment, it pays to shop around for a better deal and not be complacent with your home loan.
“Borrowers are telling us they want pricing parity between new and existing customers.
“They believe they should be rewarded for their proven repayment history and for choosing to stay with their current lender instead of switching,” Mr Waldron said.
Although most lenders have passed on the Reserve Bank of Australia’s (RBA) interest rate hikes, many lenders have cut introductory rates for the sake of competitiveness, which Mr Waldron suggested shouldn’t be the focus.
“Unless Australian lenders begin offering the same rates to new and existing customers rather than focusing on low introductory rates and cashback offers, it will pay to regularly review your home loan.
“Your broker can help you compare a wide range of products and lenders, and offer expert guidance on the best options for your situation. That way, you’ll know with certainty that you’re getting the best loan for your needs,” Mr Waldron concluded.
The refinancing boom
A previous survey commissioned by the aggregator found that 31 per cent of 1,000 respondents said they were looking to refinance their home loan in 2023, and identified the three groups most likely to seek out refinancing.
Almost one-half of borrowers (44 per cent) aged 35 to 44 said they were considering refinancing their home loans, along with 41 per cent of borrowers who already refinanced over the last two years and 38 per cent of borrowers who consulted with a mortgage broker.
Those who refinanced over the last two years were primarily driven to secure a better interest rate (58 per cent) or lower their repayments (35 per cent).
This survey complements the latest lending data released by the Australian Bureau of Statistics (ABS), which found that refinancing has entered an “all-time high” while all other lending categories recorded decreased numbers.
The ABS lending data found that the November figures for the value of external refinancing (seasonally adjusted) rose 8.2 per cent to $19.5 billion for total housing, and 20.4 per cent higher when compared to the same period in 2021.
Owner-occupier housing saw refinancing rise by 9.1 per cent to $13.4 billion, a 27.1 per cent increase in 2021, and investor housing rose by 6.3 per cent to $6.1 billion, making it 7.8 per cent higher than last year’s annual figure.
[RELATED: Lending falls amid refinancing boom]
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