Not all lenders are created equal.
What’s important to you when it comes to your chosen lender?
Is it just about a low interest rate or are things like technology, customer service and access to branches also important to you?
Is it the ease of management of having your loans and other products like credit cards and savings accounts with the one institution?
Or is it just someone who will lend me the money because I’m “unique”.
Did you know that the big four banks, including ANZ, Commonwealth Bank, National Australia Bank, and Westpac combined make up around 80% of the total mortgage market?
These banks are owned by investors and operate as for-profit institutions, and they must make a profit for their investors.
Banks have their advantages, such as they tend to be more advanced in terms of their technology and mobile apps, can have greater accessibility to branches and ATM’s nationwide, and may offer more options in terms of banking, retirement and investments.
However, they aren’t the only solution when it comes to a mortgage.
Credit Unions are an alternative that most people now have access to.
Credit Unions are different to banks in that they are non-profit institutions owned by members collectively.
Credit Unions also have their advantages including potentially lower fees and better interest rates on loans and savings accounts. They also have a large network of branches and fee free ATM’s.
When choosing your lender, it’s important to understand what lenders are offering you and what is really important to you.
What we are finding with many of our clients is an openness to consider somewhat less common lenders like credit unions.
Further, banks tend to have stricter rules and less flexibility in terms of customer service.
Here is where an alternative type of lender, known as a non-bank lender, can be of benefit.
A non-bank lender is a lender who is not a bank, building society or credit union, but one that has its own source of wholesale funds and lends those funds out with an added margin for profit.
Some of the advantages of this type of lender are they can provide lower interest rates than banks and they are subject to a different set of regulations and tend to be more flexible in terms of their lending.
So if the banks have said no, it’s worthwhile seeing if a non-bank is open to your business.
The bottom line is not all lenders are created equally. There are different types of lenders available, and each have their place in the market.
Not sure which lender to choose?
Have a great week!
The team at Build & Protect Financial Services
