Mortgage Borrowers Display No Loyalty Towards Lenders

Post by NeilMc on November 19, 2009 · Under Business News, banking, home loans, interest rates, mortgages · Comment

A leading mortgage broker has warned Australian banks not to take their mortgage borrowers for granted, with borrowers no longer showing customer loyalty to their bankers, as they seek out the best deal for their mortgage.

According to new independent research commissioned by mortgage broker Loan Market Group, first time mortgage borrowers display almost no customer loyalty, especially towards the Big Four banking groups.

“They are looking for the best deal they can get, so it doesn’t matter to them whether they have had a long-standing relationship with a particular bank or any lending institution through a savings account or other dealings.” Loan Market Group chief operating officer Dean Rushton said releasing the findings on Wednesday.

Even after securing financing with a specific lender, the study found that borrowers see themselves refinancing their mortgage several times over the lifespan of the home loan, if they felt they could obtain better terms.

The study also found that first time mortgage borrowers who now face tougher lending criteria, were actively researching the best deals on offer.

“The lending landscape provides them with a lot of options and they want to make sure they are in control and are not being talked down to,” Mr. Rushton said.

Mortgage borrowers who trade up to higher quality properties and investors, tend to display more loyalty to their bankers, but were still prepared to flip between lenders if it made financial sense.

“The lending market is more sophisticated and access to the internet has enabled buyers to be better informed about the different products and services available,” Mr. Rushton said.

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