Borrowers reluctant to switch lenders

borrowers reluctant to change banks

New research has revealed that almost half of borrowers have not switched home loan providers in the past 10 years.

According to a survey by comparison website finder.com.au, 39 per cent of mortgage holders have not made the switch despite being encouraged to take advantage of the current low home loan rates on offer.

More than half of the borrowers surveyed stated that they hadn’t switched because they are content with their lender, while 24 per cent said it was because they couldn’t find the time for all the paperwork.

One in 10 said they found it too difficult to compare products and 13 per cent think it would be too expensive.

“It’s surprising that so many households aren’t taking advantage of the current home loan market,” finder.com.au consumer advocate Bessie Hassan said.

“We’re seeing the cheapest home loan deals ever and it’s now more affordable to switch lenders since the banning of excessive exit fees to variable home loans in 2012.

“The real concern is that people may be getting complacent and wasting money just by staying put. For instance, 24 per cent of borrowers who hadn’t switched said they couldn’t find the time to fill out paperwork, but isn’t a form worth the time and effort if it will mean over $8,000 in savings?”

On a state-by-state basis, 66 per cent of respondents in Tasmania were the most likely to have never switched home loans, while 54 per cent of those living in Victoria were the least likely to have never switched home loans.

Sixty-four per cent of South Australians have never switched and the majority of those who have switched had done so within the last two years.

Sixty-three per cent of both Western Australia and New South Wales households said they have never switched lenders, while the same could be said for 59 per cent of Queensland households.

In the Australian Capital Territory, 55 per cent of respondents have never switched lenders, while 10 per cent switched within the last one to two years.

 

Related: Have a read of my Loyal or Lazy blog post.

 

Jason Thomson | Mortgage Adviser and Finance Broker | Smartline Cairns

 

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