Eight questions you should be asking your mortgage broker
There's room for the Reserve Bank to further cut the nation's official cash rate, but this shouldn't keep consumers from negotiating a better mortgage deal.
Mortgage broking aggregator Connective says Australians shouldn't sit around waiting for further rate cuts and now is a good time for homeowners to speak to a mortgage broker.
"Australians not shopping around for a better deal on their mortgage right now are essentially throwing money away," says Gingkai Tan, Connective's general manager of distribution.
"The devil is often in the detail when we're talking about mortgages, and the key to saving money is knowing what questions to ask your mortgage broker and your lender."
Tan says homeowners should ask their mortgage broker the following questions:
- How do you decide which loan is best suited to my situation and requirements?
- What features of a home loan should I consider and how much do they cost? For example: How much more does it cost to have an offset account or a redraw facility?
- Can I make additional repayments on my home loan?
- Will there be any ongoing fees and charges?
- Are there any early termination fees?
- Is there a home loan that will help me save on other banking products such as a no-fee, low-interest-rate credit card?
- Do you offer home loans from any other lenders besides the big four banks?
- Which lenders are you accredited with?
However, he notes that asking your lender to lower the interest rate on your mortgage is not always going to guarantee the best outcome. There could be hidden fees associated with paying off your mortgage earlier than expected.
Earlier this year, non-bank lender Pepper surveyed 1126 borrowers and found the greatest concern was getting the right home loan for their circumstances.
Mortgage brokers remained the borrowers' preferred channel for securing a mortgage, despite royal commission backlash, the Pepper research showed.
About a third of borrowers were worried about being declined by their bank.
"With a volatile property market and pullback from the big banks in certain parts of the lending market, consumers will be looking to trusted experts more than ever to help them determine the best solution for their situation," says Aaron Milburn, director of sales and distribution at Pepper.