Tim McIntyre is the senior real estate reporter for the Daily Telegraph and News.com.au.
Over the past decade, he has attained widespread knowledge of Australia’s many unique property markets and is an authority on all things buying, selling and investing.
His commentary appears every Saturday in the Daily Telegraph Real Estate lift out, as well as online at news.com.au.
Interest rates may be low, but if you think outside the big four banks and check out all your other loan options, you have probably noticed that online only lenders always seem to offer better rates than most of the banks that have an actual physical presence in the community.
Getting a home loan from an online lender can mean big savings over the term of a mortgage, but it may not be the right option for everyone, so it’s important to read the fine print and understand exactly what you’re getting yourself into.
The reason web-based lenders are able to offer the cheapest rates are because they don’t have the overhead costs that come with actual bricks and mortar bank branches. So, they don’t have to spend their money on renting office blocks, hiring customer consultants and tellers and buying acres of velvety ropes that show everyone where to stand in line while they wait to see someone.
By existing online with less staff and saving on advertising campaigns, it would then seem pretty reasonable that they have more money to give back to clients. Of course, that lack of expenditure on staff also means customers may not have all their needs catered for, with less people on hand to offer service and deal with the issues or queries that individuals will undoubtedly have. So, in a nutshell, you get what you pay for.
If you are the type of person that requires regular, ongoing care and accessibility from your lender, then an online mortgage may not be right for you. But if you are confident that you know most of what you need to know about how a home loan works, and are interested primarily in saving money, you may find your dream product at a mouse click’s reach.
But be aware that you need to be thorough. Choosing online means researching fees, charges and hidden costs yourself, before you sign up. Remember, a mortgage is a financial partnership that lasts for decades, so do your due diligence before going online.