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Second tier banks, mutuals and non-bank lenders are offering borrowers significantly cheaper mortgages than the major banks yet the bulk of borrowers fail to look beyond the big four, a new report has found.
According to independent financial research company InfoChoice borrowers are paying an extra $2.7 billion in repayments every year because they fail to shop around for the best deal.
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The company found that around 90 per cent of home buyers chose one of the big four banks for their home loan yet an analysis of rates this week found more than 60 lenders were offering lower home loan rates than CBA, Westpac, NAB and ANZ.
"It is baffling that so many new homeowners refuse to look beyond the big banks and take advantage of lower rates from more competitive institutions,” said InfoChoice CEO Shaun Cornelius.
"There is competition in the marketplace, it's now up to the consumers to take responsibility for researching and locking in the best possible deal," he said.
