When couples cheat, it’s usually seen as scandalous. But when it comes to home loans, being unfaithful can actually be a good thing.
Double-crossing mortgage holders – that is, those who shop around for a better deal – pay 30 basis points less on their home loan than those who stick to their current interest rate, uno Home Loans has found.
Research conducted by Core Data on behalf of uno found 70% of Australian men and 60% of women ‘play the field’ and look for better offers than their current lender can provide. Those who do, ultimately end up paying less over the life of the loan ($1,092* per year on a $500,000 mortgage or $32,760* over a 30-year loan) than those who stay faithful.
“Banks don’t always love you back for blind loyalty and not looking over the fence can have a significant cost,” uno Home Loans chief executive Vincent Turner said.
The survey of 1500 Aussie mortgage holders found homeowners who compare their rate against the market every six months tend to have an average interest rate of 4.27% compared to the 4.58% interest rate paid by those who resist the temptation to look elsewhere.
Interestingly, male homeowners are more likely to cheat on their lender than women: 70% having a wandering eye compared to just 60% of female homeowners.
Turner said the suitability of a home loan can change depending on a customer’s circumstances so it’s important for home owners to review their rate periodically to ensure it’s still suitable. “You may have drifted apart from your lender over the years and they may not suit your current needs – it happens,” he said.
“Interest rates are sitting at low levels, so it’s a great time to play the field with your home loan rate and trade up to a lender that loves you back.”
Key research findings**
- 65% of Aussie mortgage holders compare their home loan interest rate against the market while a faithful 35% say they never compare
- 70% of men look at other options compared to just 60% of women
- Average interest rate of homeowners who compare their rate every 6 months: 4.27%
- Average interest rate of homeowners who compare their rate every 12 months: 4.39%
- Average interest rate of homeowners who never compare their rate: 4.58%
*Calculation by uno Home Loans comparing the mean interest rate of 4.27% among mortgage customers who compare their rate every six months with the mean rate of 4.58% among those who never compare using a $500,000 principal and interest loan over a 30-year period
**Research conducted by Core Data on behalf of uno as part of a study of 1,500 Australian mortgage holders.