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By: Staff Reporter
Most borrowers believe holding a savings account with a bank will result in an automatic interest rate discount when they take out a home loan, a new survey has found.
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According to Loan Market Group’s latest survey, most brokers found their borrowers had misplaced confidence in their lender.
Of the 152 brokers polled, more than one in three listed “borrowers who thought they had a pre-approval, when really the bank only checked borrowing power” as the top misconception about banks.
“There can be a lot of confusion and misunderstanding about how the home loan market works,” Loan Market chief operating officer Dean Rushton said.
“A lot of borrowers also believe that if they are a current client of a bank that they will automatically get a bigger discount when they apply for a home loan, but that is not the case.”
Mr Rushton said another misconception from borrowers was that the bank they have accounts with will automatically lend them as much as any other bank or lending institution has offered.
“This was among the top three most common misconceptions found in our survey of Loan Market brokers,” he said.
“Thirty six per cent of brokers found their clients believed they had a pre-approval when the bank had only checked their borrowing power.
“Twenty seven per cent had clients who thought their bank would match lending offers from other banks while 26 per cent thought their bank would give them an automatic discount interest rate on the loan.”
