Do homeowners prefer brokers or banks when refinancing?

Most homeowners looking to refinance their mortgage think they can get a better deal by speaking to a broker than a bank, according to a recent Mortgage Choice survey.

The survey, conducted by CoreData between October 14 and 27, 2020, gathered a total of 1,023 responses from Australians across the country aged between 21 and 60 years old who are either a “first home buyer” (494 respondents) or a “homeowner/investor” (529 respondents).

Read more: Mortgage Choice broker reveals his approach to upheaval

Data from the survey revealed that, while two out of five (38%) respondents are either in the process of refinancing or are considering switching to a new loan, one in two (53%) is reluctant to speak with a bank for refinancing advice out of concern they won’t be advised if there is a better deal elsewhere.

Conversely, a whopping 94% of homeowners trust a mortgage broker’s home loan recommendations – with 55% saying that they value “the support brokers provide comparing different loans, rates, and features.”

“Faced with what can be an overwhelming choice of home loans, homeowners want to be confident they are making the move to a loan that will improve their financial wellbeing through a lower rate, improved loan features, or both,” said Susan Mitchell, chief executive officer of Mortgage Choice. “While banks can provide information on their own product suite, they do not have an in-depth understanding of competitors’ products. That is why I urge borrowers in the market for a better deal to engage the help of an experienced mortgage broker to learn what other options they have.”

According to Mitchell, mortgage brokers “not only provide a broad selection of loans across a variety of lenders, they also take the time to explain why a particular loan is being recommended.”

“This is very reassuring for consumers and demonstrates that mortgage brokers work in the homeowners’ best interests at all times,” said Mitchell. “This important combination underpins the exceptional level of trust that homeowners place in their mortgage broker.”