Although some improvements have been introduced, significant barriers remain for borrowers looking to switch home loans.
According to research conducted by RateCity consumers are finding it very difficult to switch home loans and switch transaction accounts between banks.
One of the most significant stumbling blocks with mortgage refinance is the mountain of paperwork required by the new lender. The next big issue is costs. By the time a borrower takes into account what they will need to pay their current lender to part ways – it is often cheaper to stay.
Damian Smith, RateCity CEO, said switching barriers remained a key area for government action.
“Over the past couple of years it has gotten easier for Australians to switch between financial institutions but it still isn’t easy enough,” he said.
“Initiatives like greater transparency on exit fees from home loans and a one-stop shop to help move direct debits from one account to another, would have a real impact.”