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Weigh up loan options before switching

MFAA

The Mortgage and Finance Association of Australia (MFAA) has called for borrowers to not be spooked by the troubles in the market, and to carefully weigh up their options before switching lenders after the official home loan figures by the Bureau of Statistics showed new loans being signed by banks are at a record high.

"We know some commentators and industry players have been encouraging borrowers to switch from non-bank mortgages to banks predicting problems on the horizon for the non-bank sector" said Phil Naylor, CEO of the MFAA.

"Non-banks provide consumers with choice. There can be great benefit in people shopping around and re-examining their home loan provider and product periodically. Different lenders have different products and while switching to a bank may be the right move for some borrowers, it may not be the answer for everyone," said Mr Naylor.

"A non-bank product may be a better option for some borrowers. Full consideration needs to be given to all of the features of a loan including interest rate, features, fee structure and level of service before a change is made.

"Our latest MFAA / BankWest Home Finance survey showed that non-banks were also rated very well in terms of customer satisfaction, rating 7.1 out of a possible score of 10. Credit Unions ranked best, with a score of 7.9 followed by brokers and building societies. Banks scored only 6.6 on the scale," said Mr Naylor.

"It is also a complete fallacy to insinuate that non-bank lenders are the only credit providers to be impacted by the international credit crunch. Banks are also reliant on international and wholesale credit market to fund their lending as well," said Mr Naylor.

For more information contact MFAA

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