Opinion on Big Lenders Vs Smaller Lenders?

• 

  kipps on 16/08/2019 - 17:57

  +1

  Just factor in the cost of discharge/refinance & your time to refinance every 12-24 months and kick off to a competitor when they are no longer competitive. May as well try them if those costs don’t sink the deal.

• 

  Typical16-bitEnjoyer on 16/08/2019 - 18:27

  +2

  Ah, a mortgage broker that wants you to refinance your current mortgage to a different lender. That's unique! /s cough commission

  • 

    netjock on 16/08/2019 - 18:30

    They want the trailing commissions.

    • 

      Typical16-bitEnjoyer on 16/08/2019 - 18:33

      An upfront commission payment for the mortgage loan settling is normally somewhere equivalent to about 5 years of trailing commission.

• 

  netjock on 16/08/2019 - 18:30

  Given the low interest rates and depending on size of your loan it might not be worthwhile to refinance.

  Fine someone who can do a quick calculation for you.

• 

  loropy9 on 16/08/2019 - 19:42

  Firstmac is ok. Don't be afraid, they are no different with rates than any other lender. That is, whatever lender you are with, your rate after 5-6 years will not be as good as that same lender current rate. They all increase out of cycle and don't pass the full cuts.

• 

  p1 ama on 16/08/2019 - 22:57

  +1

  Your broker is a sales guy. It doesn't mean that he's out to get you or that he's being dishonest in his advice, but know that he gets a kickback.

  I'd say that it's a toss. In my experience, each have their benefits. You tend to get better rates with the smaller lenders purely because they have less overheads and costs and can operate on thinner margins. If you are a "run of the mill" borrower with salaried income, then basically any place will do, just go with whoever are the cheapest.

  The Big 4 banks have their benefits too. I find that it's more possible to negotiate with them and sometimes you can get within a stone's throw from the rates you get from lower lenders if you have a chat to them and are firm on what you want. I'm not sure what it's like to take out a mortgage after the Royal Commission, but before then, the Big 4 banks were known to be softer on the requirements than smaller lenders (because they can absorb the risk) and would often lend when nobody else would

• 

  ExclusiveLoanSolutns on 23/08/2019 - 10:02

  We have Tiered lender system whereby the Big-4 are Tier-1 Lenders whereas smaller banks such as Citibank, Suncorp come in after that and then we have lenders such as Liberty, FirstMac etc etc.

  I am a Broker and can say few things for you to consider:
  1) Without knowing your situation we cannot provide specific advice but believe the reason why your broker has suggested FirstMac is possibly due to serviceability issues.
  2) In general we try to get a good rate and right loan with the big-4 but if the clients requirements are something that are not what Big-4 offer then we start looking outside, e.g Client has paid off a big chunk of o/o loan and wants a good interest only fixed rate or lowest variable rate.
  3) Moving to lenders such as FirstMac has its niches as long as there is a long term plan(can be to move to more mainstream lender or change loan structure etc etc).
  4) I have used FirstMac as a part of my recommendations to my clients when I knew We had worked an exit strategy with clients and we were clear on what we aimed to achieve.

  Mortgage Brokers do the work for their clients and find a loan that best meets their clients needs, if they get paid for that then why should that be an issue.We do annual Home Loan Health check for our clients and regularly speak to our clients to discuss any of their needs. Furthermore subject to loan balances we also pay our clients refinance fees and annual package fees from our commission.

• 

  BuDWiZe on 25/08/2019 - 12:28

  I was going to go with another lender but now with offset was 3.39 and I've had no hassles do just stayed with them when I did a new house rebuild