Young mortgage holders looking for better deals: MyState Bank

Research commissioned by the bank found that 50 per cent of Millennial and Generation Z mortgage holders have searched for a better home loan deal in the last six months compared to only 37 per cent of Generation X and 31 per cent of Baby Boomers.

The research that was conducted nationwide also revealed that those with a mortgage in NSW (32 per cent) or Victoria (31 per cent) were more likely to have looked for a better deal in the last six months than those in Queensland (20 per cent) and Western Australia (16 per cent).

The survey, which was conducted across 1,009 Australian mortgage holders, also found that women are more likely than men to have not looked for a better deal on their home loan over the past six months, as well as not having any plans to do so in the future, 27 per cent compared to 18 per cent.

MyState Bank’s general manager, home lending Tim Newman commented that the results were unsurprising as many younger home owners are growing out of cheap fixed-rate periods and looking for a better home loan deal.

Mr Newman stated: “Generationally, the banking industry’s youngest customers, those facing the greatest financial shock after a steep climb in interest rates, are the most active when switching their home loans.

“In contrast, Baby Boomers, with smaller mortgages, are more likely than the younger generations to say they haven’t looked for a better deal for their home loan in the past six months and have no plans to do so (38 per cent, compared to Millennials/Gen Z: 16 per cent and Gen X: 23 per cent).

“Among those who looked for a better deal in the past six months on their mortgage, a third (34 per cent) or the equivalent of 1 million Aussie mortgage holders stated that no one could match the deal they are currently on.”

Of those who did look at getting a better deal on their home loan, only just over half (53 per cent) were confident that they would be able to refinance their loan for a better deal, with two in five revealing they were not confident.

Mr Newman called on those looking for better deals to make sure they do their due diligence to ensure they understand the differences between lenders and what they are being offered.

He added: “While the interest rate is important, ensure the product and lender you select can meet all of your needs.

“Be aware of any fees and costs associated with refinancing, including any discharge fees from your existing lender – as these can quickly erode any savings you achieve with a lower rate.”

With the rising cost of living increasingly becoming a factor, the research found that younger mortgage holders, Millennials and Gen Z (84 per cent), were more likely than Gen X (77 per cent) and Baby Boomers (75 per cent) to say that it was impacting their ability to service their mortgage.

It also found those living in NSW (85 per cent) were the most likely to point to the rising cost of living as a challenge to servicing their mortgage.

“Australians are clearly tightening their budgets and cutting back on non-essential spending, but the lack of savings buffer among some borrowers is of real concern,” Mr Newman concluded.

“The combination of interest rate rises and the cost of living has depleted household savings and younger generations are among the hardest hit.”

[Related: MyState Bank announces new head of lending]