First home buyers issued loan warning
Mortgage comparison website RateCity has warned first home buyers to research the best mortgage deal before jumping in with both feet.
The warning comes after the Australian Prudential Regulation Authority (APRA) showed both Westpac and CBA had increased their market share for owner occupied home loans in the 12 months to April despite offering high headline interest rates.
According to APRA data, the big four banks account for more than 80 per cent of the residential mortgage market.
“The major banks continue to offer higher headline rates than their smaller competitors yet more borrowers are taking out mortgages with them,” RateCity’s chief executive Damian Smith said.
“The benchmark basic variable rate – the average of the major four banks – is currently 6.78 percent but compared to RateCity’s top five variable home loans, they are all under the benchmark by at least 11 basis points.”
A recent Mortgage Choice study found that the majority of first home buyers surveyed don’t shop around when choosing a home loan, and yet they are the most at risk of a higher than necessary interest rate and extra monthly repayments.