An online mortgage broker says Australian home owners could be saving more than $1.3 billion annually on their home loans by stripping away commissions and conflicts of interest.
Recent data by Unbiased Mortgage Advisers (Unbiased) has found that the service is saving its customers an average of $14,344 on their mortgages over five years.
The online mortgage broker, which claims to be “Australia’s first, truly independent and unbiased mortgage service”, doesn’t restrict lenders and rebates all commissions and incentives back to borrowers.
The data showed that the service achieves an average saving of almost $3,000 per customer, per year, against the best loan they were able to find without the service’s assistance and without forgoing desired features and lender quality. Further, an average of 136 deals were found, per customer, that offered savings on their current best deal.
“The data tells us that once you strip away the commissions, the limited range and conflicts of interest, and really compare apples with apples from an unrestricted panel of lenders, Australian home owners are not getting an accurate snapshot of their options,” founder of Unbiased Miki Lee said.
Unbiased analysed the data from customers who had used its online service to refinance existing loans during the first six months of its operation.
“Refinancing to reap savings is a smart move, but the ideal time to get your loan right is when you’re buying your property in the first place. But whether refinancing or taking out a mortgage for the first time, borrowers can’t rely on advertised rates as lenders increasingly price loans based on the individual borrower,” Ms Lee said.
She highlighted that it is impractical for a borrower to deal directly with 100 or more lenders to find the deal that best matches their needs.
Ms Lee said she believes that only six months after the launch of Unbiased, the service is already challenging the idea that mortgage brokers have the systems, tools, technology, lender access and knowledge to act in the best interests of borrowers.
“The need for cost-effective, unbiased mortgage advice is more pressing that ever,” she said.
[Related: Online brokerage enters third-party channel]