Over the past year it’s become harder to borrow money, especially for investors. Yet many buyers continue to limit their finance options.
Even though there are more than 100 mortgage lenders in Australia, three-quarters of borrowers use the big four banks.
So your buyers could be narrowing their options if they’re restricting themselves to just ANZ, Commonwealth Bank, NAB and Westpac.
The next time you’re having a conversation with a buyer who’s struggling to get a pre-approval, it can’t hurt to ask if they realise how big and competitive the mortgage market is.
You don’t have to be an expert on all these challenger banks, credit unions, building societies and non-bank lenders. All you need to do is tell your buyers that these institutions exist, and that it can’t hurt for them to explore their options.
By the way, these smaller lenders often provide lower rates, more flexible policies and better customer service than the big four.
One non-bank lender, Reduce Home Loans, is currently offering a variable owner-occupier mortgage from 3.39 per cent. That’s not to say the cheapest rate is always best – just that buyers can really benefit from doing their research.
Another way you can help buyers with finance problems is to give them the contact details of a trusted mortgage broker. Good brokers are familiar with the different credit policies used by a range of lenders; they might know which lender is likely to approve finance for their particular circumstances.
According to the latest statistics, mortgage brokers organise 53.6 per cent of home loans in Australia, so they’re now the preferred choice for a majority of borrowers.
Here are the three key numbers for you to remember:
- There are about 150 mortgage lenders in Australia.
- Variable interest rates can be as low as 3.39 per cent on RateCity.com.au.
- Brokers are now used by 53.6 per cent of borrowers.
Providing buyers with some simple mortgage information could help you generate more competition and improve your sales results.