Banking loyalty costs customers
LOYAL banking customers are being slugged as much as $70,000 extra over the life of their loan just for sticking with the same bank, figures show.
Despite the cash rate remaining at a record low 1.5 per cent, many lenders deny loyal customers the same deals they offer “new” customers, which include significant life-of-loan discounts.
Financial comparison website RateCity said some lenders were offering rate discounts althey most equivalent to nearly five rate cuts – or up to 1.11 per cent – giving customers rates as low as 3.69 per cent.
This could save the typical Australian mortgage customer on a standard $300,000 30year home loan more than $70,000 in extra interest charges over the life of the loan.
RateCity spokeswoman Sally Tindall urged “ideal” home loan customers – owneroccupiers with a loan-to-value ratio less than 80 per cent, who pay principal and interest – to review the deals and ensure are not missing out on what new customers can get.
“Existing borrowers should look up what their bank is offering new customers and use that as a bargaining chip to ask for a rate reduction,’’ she said.
“If you have got that evi- dence in front of you, you will put your bank between a rock and a hard place.”
Mortgage and Finance Association of Australia CEO Mike Felton said borrowers should review their loans every three to six months.
“Complacency can cost a lot of money,” he said. “We get so used seeing the same monthly repayments ... each month we tend to lose sight of what the rates and fees are. Customers should check their home loan interest rates and fees to make sure they are competitive.”
IF YOU HAVE THAT EVIDENCE ... YOU WILL PUT YOUR BANK BETWEEN A ROCK AND A HARD PLACE SALLY TINDALL, RATECITY