This is a really interesting article from today’s paper in Australia.

Australian loan borrowers are not shopping around for the best deals so are paying a whopping $2.7 billion a year in repayments!

HOME loan borrowers are paying an extra $2.7 billion a year in repayments because they don’t shop around for the best deals.

Despite the major banks charging higher interest rates than smaller lenders, about 90 per cent of home buyers still choose one of the more expensive big four banks, according to financial research company InfoChoice.

We were in the exact same position about 5 years ago. I had taken out my loan with one of the big 4 banks way back and had never bothered to shop around since. I think part of it came down to complacency and some just plain laziness but I was with the one banking institution for well over 6 years.

When things got tough and we were struggling to make ends meet, MsPennyPincher started shopping around for a better deal. We saved a small fortune, cut years off our home loan and now own our home because of the decision we made.

In terms of finding a new product, most banks are more than happy to discuss you refinancing with them and will often wave fees to get your business. It is a competitive market and they need your business just as much as you need a loan.
In terms of effort, it is minimal compared to the long term benefits you can expect to gain.

“It is baffling that so many new homeowners refuse to look beyond the big banks and take advantage of lower rates from more competitive institutions.

“Claims that consumers have little choice but to go with the big four are wide of the mark.

“There is competition in the marketplace, it’s now up to the consumers to take responsibility for researching and locking in the best possible deal,”

Read rest of this article

Do yourself a favor and start shopping around, there is money to be saved!