There’s a great migration playing out in the Australian mortgage market. With a rapid increase in interest rates and a tendency among lenders to offer their best deals to new customers, a record number of mortgage holders are seeking greener pastures by switching providers.
The loans refinanced in November ($19.3 billion), December ($19 billion) and January ($18.6 billion) were the three highest monthly totals yet recorded by the Australian Bureau of Statistics, and with recent rate rises still working through the system and many borrowers set to come off low fixed rates in the months ahead, there’s likely to be plenty of refinancing to come.
Deciding to switch to a more competitive deal is one thing, but identifying the right option from a sea of banks, credit unions, and online and specialist lenders can be challenging.
While each lender is unique, one way to break down the market is to split it in two: on one side you have banks and other authorised deposit-taking institutions (ADIs) that offer mortgages in addition to other banking products, and on the other you have specialist non-bank lenders whose bread and butter is mortgages.
Here’s how the two types of lenders compare on key points.
Interest rates
Interest is one the most important features to consider – after all, the lower the rate, the lower the repayments. Given that, lenders offering low-rate loans are naturally going to be a popular destination for many borrowers.
This story is from the April 2023 edition of Money Magazine Australia.
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This story is from the April 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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