About 84% of people who plan to take out a mortgage or refinance their current home loan over the next year are likely to shop around for a great deal, reveals new research by Aussie Home Loans.
Current market conditions are conducive for this trend, with mortgage rates at record low levels and numerous lenders offering new deals and promotions.
“Borrowers are increasingly savvy about the need to get a second opinion when it comes to making possibly the biggest financial commitment of their lives, and I think this is a really positive trend in such a competitive market,” James Symond, chief executive officer of Aussie Home Loans, was quoted as saying by news.com.au.
The study also discovered that more borrowers are finding other ways to take out a home loan. While 8 out of 10 people looking for a home loan would rely on banks and brokers, 64% of the survey’s owner occupier respondents favoured using a mortgage broker to help them.
Differences between the behaviour of first home buyers and refinancers were also revealed by the study. Although both groups are the most likely to shop around (at 87% and 86%, respectively), refinancers were the least confident of the two to compare and select a home loan on their own.
Indeed, only 53% of refinancers would choose their own loans, versus the 70% of first home buyers eager to select their own mortgages.
Additionally, refinancers were the least likely to choose to deal with banks for their loans, at 59%. The proportion of first home buyers who prefer to transact with banks is at 66%.
“It’s interesting to see that refinancers who already have home loan experience are less confident than someone just starting their property journeys,” Symond said.
“Regardless of experience, my tip for all borrowers is to continue to do your homework because how will you know if you’ve genuinely got the right home loan for your needs with the best possible rate unless you seek more than one opinion?” he urged.
Moreover, social media is increasingly becoming a popular tool in helping borrowers find home loans. The study detailed that social media enjoyed a 7% jump in the number of people asking their family and friends for financial advice.
“Unsurprisingly, first home buyers are the most savvy when it comes to seeking recommendations from their social networks both on and offline. While it shouldn’t replace getting expert home loan advice, one person’s good experience is a positive indicator for someone who’s shopping around, so I’m not surprised to see social referrals on the rise,” Symond pointed out.
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