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A significant number of borrowers believe going direct to lender is more convenient and produces a better deal, according to new research.
QBE’s fourth annual report into mortgage and property market sentiment found that convenience was the main reason respondents gave for choosing a bank – but also the main reason people gave for choosing a broker.
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The survey of 1,061 Australians found that 40 per cent of direct-to-bank customers regarded the bank as the more convenient option, while 39 per cent said it was the easier option and 26 per cent said it was the way to get a better deal.
Of those respondents who used a broker, 46 per cent said it was the more convenient option, 38 per cent said it was because the broker would do the research for them and 37 per cent said it was because the broker offered personalised advice.
“The primary motivation for using a mortgage broker remains convenience rather than the borrower’s belief they will get a better deal, suggesting younger people are perhaps happier to outsource the search process,” according to the report.
“Perceived easiness is particularly important to first home owners, suggesting there is greater confidence in the ease of process with main financial institutions among those unfamiliar with the mortgage acquisition process.”
The survey also found that loan sizes and LVRs are increasing, while only 27 per cent of respondents have mortgage repayment protection insurance.
“The low incidence of mortgage protection insurance reflects a general optimism about financial security, which is at odds with respondents reporting interest rate rises will have a substantial negative impact on their finances.”
The survey found little mortgage stress among respondents: 46 per cent were ahead of their repayments, another 34 per cent were having no trouble and 3 per cent were struggling.
According to the survey, 53 per cent said losing their job would not be a problem for meeting their repayments, while 3 per cent said it would leave them unable to pay their mortgage.
[Related: Red tape curbing growth, says QBE]
