AUSTRALIANS are abandoning home loans with the Big Four banks to save hundreds of thousands of dollars on their mortgages.
As the major banks continue to tighten lending criteria, customers are shifting their home loans to smaller and non-banks, which are providing better deals albeit with higher levels of risk.
Currently a standard variable rate home loan with a Big Four bank is about 5.22 per cent, but smaller lenders are offering deals as low as 3.56 per cent.
If a customer refinanced to this lower rate on an average-sized mortgage of $371,700 over 25 years then the savings would equate to $105,000 — or $348 per month.
Data from mortgage broker HashChing has found 53 per cent of their 1800 home loan refinancing applications each month are from Big Four customers on the lookout for a better deal. The data shows 37 per cent were from Commonwealth Bank, 23 per cent from ANZ, 21 per cent from National Australia Bank and 19 per cent from Westpac.
HashChing chief executive Mandeep Sodhi said while the major banks are great at retaining loyal customers, with one-third of Australians not switching their financial institution since childhood, better home loan deals could be found among the smaller lenders.
“People are complaining about not getting a pay rise.
However, if they were to shop around for a new loan they could get a pay rise straight away,” Mr Sodhi told The Saturday Telegraph.