Is it better to go with Ubank direct for a home loan or with a broker?
Any good brokers in Melbourne to recommend?
Cheers
New Home Loan Direct with UBank or via Broker?
LemonShapedRock on 27/11/2019 - 20:51
Last edited 02/12/2019 - 04:11 by 1 other user
Last edited 02/12/2019 - 04:11 by 1 other user
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Yes, Ubank is a subsidiary of NAB
Nope, not a subsidiary. UBank is a division of National Australia Bank Limited ABN 12 004 044 937. Call it a nickname if you like, but UBank is NAB. Banking changes resulting from the recent Royal Commission basically means brokers are now obsolete. Going straight to UBank would give you pretty much the same.
You must get invited to a lot of trivia nights I imagine
Thanks for the input
Broker here.
Definitely not obsolete.
If effect, the new best interest duty (that applies to brokers, not bankers) will ensure we continue to gain market share.
Why would you go to a banker that has one option for you, and no duty to act in your best interest?
@sweefu: As a broker, are you able to get a better offer from a bank for a customer than the customer approaching the bank directly? Who pays for your services now, the customer or the bank?
@trex: Bank pays us commission for sourcing business. There has been no change in this.
In some cases I will get better pricing than direct. In some cases it will be the same.
@sweefu: So if a certain bank offers you a higher commission than another bank, would you direct your customer to take a loan from the higher paying bank? Based on such commission arrangement, the bank is in fact your customer and not the individual seeking your services.
Could you give a % indication of how many exactly is some cases that you get better pricing? It is also not hard to get interest rates reduced by the bank simply by calling them.
These days with the internet it is so easy to shop around for a home loan and there's no actual legwork involved. If the Royal Commission gets its way, commission paid by the banks to mortgage brokers will be eliminated. I don't see anyone willing to pay for brokers fees so IMHO brokers will become obsolete.
@trex: You've clearly got a bit of an agenda here, but i'll play along.
I've never directed a client to a high commission paying option. There is very little difference between what the banks pay, and I couldn't tell you what they are. All of my staff are incentivised purely on customer experience.
Impossible to tell a % of better pricing. My customers very rarely go back to a bank after on boarding with my business.
There is much more to a loan than price, and there is plenty of legwork in finding the right option.
My business is a pretty even split between commercial and residential lending. I charge all commercial clients a fee for service in addition to commission from the lender.
I know you don't see it, but brokers play a vital role in assisting people in getting their finances set up properly. If commission ceases to exist, the big 4 banks will benefit, and people that need advice most (FHBs, lower income households etc) will suffer. Wealthy individuals and business will pay for credit advice.
@sweefu: Sorry to turn this into a AMA :D but I don't know what agenda you mean. Don't get me wrong, I make use of brokers for commercial insurance products because insurance is very much more complicated and varies greatly. Getting quotes from different insurers involve actual legwork. Use of brokers in this aspect saves my time and premium cost. Since I pay the broker a fee to help me to source the best insurer, I know they will act in my interest or I simply won't pay them.
My opinion is of course just my own and is a reflection of my background in Finance. Others will probably see it differently. I find it hard that brokers would continue to exist for residential lending if the broker fee is passed on to the client. Perhaps one way is as indicated by you where your business provides other value added services like helping your clients set up their finances properly and giving credit advice which in my opinion is more in the capacity of a personal financial planner than a mortgage broker.
If commission ceases to exists, I don't see how the big 4 banks will benefit. Instead of relying on external brokers, they will simply spend more on their sales/marketing staff to sell their loan products and will be business as usual. While your business is more ethical, there's clearly a conflict of interest with the commission which other brokers in the market may not be as ethical. Imagine a world where tax agents are paid by ATO to prepare your tax return….shudder….
@trex: The big 4 have a distribution network outside of the broker market. Smaller, cheaper lenders do not.
If brokers cease to exist, the big 4 will gain further market share, and in turn increase their margins.
It isn't a coincidence that banks net interest margins have decreased as broker market share has increased.
Source: https://www.rba.gov.au/chart-pack/banking-indicators.html
We bring competition to the mortgage market that will not be there if we don't exist.
@sweefu: hmmmm… are you saying that majority (>50%) of the loans you brokered successfully for was not with any of the Big 4 or of its affiliates?
As a consumer, I don't really mind if the market is dominated by Big 4. Economies of scales and fair competition will make the rates competitive. I would be worried only if the market is dominated by 1 or 2 banks.
"Correlation does not imply causation". According to Core Logic broker market share hits new high but:-:-
Overall value of lending through the broker channel was down $5.249 billion or 11.39 per cent to $40.847 billion year-on-year, compared to $46.096 billion settled in the March 2018 quarter.
Size of the cake has shrunk, making the slice held by broker market to appear bigger in % sense. Banks net interest margins have decreased not because broker market share has increased. It decreased because borrowing and housing market has declined significantly along the decline in interest rates.
If you're looking at UBank vs UBank, I can't imagine there's much difference on paper.
If you're not the kind of person willing to haggle and push for a good deal, then a broker may come out on top.
i thought ubank don't deal with broker
We found it useful to go with a broker who could see all the options for us. Although we did do our own research for online-only lenders (which brokers don't have access to), and found that a lot of the great online-only loans had very strict conditions attached.
Yep Ubank don't offer commissions to brokers so they won't refer you to them.
Just finished my refinance ANZ to Ubank, took 6 weeks all up. Fair bit of back and worth with docs and questions but nothing too crazy
Do what you think is best.
If you have a lot of questions or don't feel comfortable dealing with the banks, go to a broker.Ubank home loan product is offered via Advantedge which is owned by NAB.
Most brokers have access to a product through Advantedge.There's a reason that UBank have very low rates, they don't pay brokers. Brokers seem to get 6 to 7 thousand dollars for setting up an average loan, guess who pays that! A broker is really only useful if you are struggling to get finance or couldn't be stuffed dealing with banks.
If you're loaning against your limits, leveraging equity, have unusual income stream structures (e.g. trusts, business, SMSFs, etc), indebted or otherwise seriously incompetent at basic life skills - getting advice from a broker offers value. However, most of the population looking to get a mortgage would not fall into any of these categories and the value proposition would be questionable. The increasing rate that Australians are applying directly through banks reflect that.
If international trends are anything to go by the residential brokerage industry will be going through some interesting times in the next few years. The brokers who endlessly post comments online about how much they add value to the average Joe are like the horseshoe makers who refused to acknowledged that the automotive industry would disrupt their industry. The specialised property brokers will be fine though.
UBank = NAB.