Last week Commonwealth Bank became the latest of the big four to launch a marketing campaign aimed at undercutting the competition with low interest rates.
CBA’s Home Loan Guarantee promised consumers that they’d beat any rate offered by ANZ, NAB or Westpac through to the end of September. Sounds like a good deal for mortgage holders, but what many people don’t realise is that the best home loan rates in the market aren’t offered by the big four.
Even after CBA dropped their rates a few weeks back, my company Yellow Brick Road has a range of fixed and variable home loan rates that are much lower. So were many other non-bank lenders, credit unions and building societies in the market. The banks have the marketing power and the reach, but when it comes to the lowest rates, they simply can’t compete.
We all know we’re facing a fog of economic uncertainty, and with that uncertainty comes competition from the banks. But it’s not just financial services that are offering a better deal. What we are seeing at the moment is fierce competition across a range of industries including retail, tourism, food and beverage, and building to name a few. These days, it’s rare to find a situation where something is non-negotiable. Try it for yourself. The next time you’re out shopping don’t be afraid to ask, ‘Can you do any better on the price?’ You might be pleasantly surprised at the response.
The same goes for mortgages. This year NAB started a slugging match with their break-up campaign, and it wasn’t long before the other big banks jumped into the ring. It’s to the benefit of consumers who are facing tough times and are looking for any way to capitalise on a better deal, especially if it’s going to save them money on their home loan.
So what can you do to get in on the action? Start by broadening your horizons beyond the major banks. Commonwealth Bank and the like have a bigger platform and a better marketing budget, but it’s often the independent lenders who have the lowest rates. Do your research; there are also plenty of online comparison sites that consumers can use to look at different options. Once you’ve made a decision about who you’d like to do business with, ask the lender if they can do any better than what’s currently being offered.
Finally, don’t forget that it’s not just about the rate. Advice from a trusted professional can be critical in helping you make the right decision for your future. Be smart, look around, and demand a better rate with the service and advice to match.
* Mark Bouris is the Executive Chairman of Yellow Brick Road, a financial services company offering home loans, financial planning, accounting & tax and insurance. Email Mark on mark.neos@ybr.com.au with any queries you may have or check www.ybr.com.au for your nearest branch.