Home Loan Myths Busted!

November 13, 2019

What are the biggest myths that could be hindering your home loan experience?

Fake or fact image to help explain some home loan myths

There are many myths surrounding the home loan and refinancing process that can create an overwhelming feeling for consumers who are looking to secure a better home loan rate.

These myths are often created through confusing or misunderstood information in the financial services sector.

In this article, we bust the three most common home loan myths.

Myth 1:  It’s too difficult to switch banks

Home loan shopping shouldn’t be that hard. In fact, a home loan should be one of the most convenient and transparent shopping experiences. As competition increases in the home loan market in Australia, good customers are discovering that mortgages are becoming more and more portable. The fees and efforts that are associated with switching banks are getting lower and increasingly, much of the work can now be done online. 

You can check your loan agreement to see if your lender charges a discharge fee when you repay your home loan account. A Discharge Fee can typically range between $150 and $500. Allowing for government charges, you can expect to pay in the order of $1000 in total. It can make sense to discuss with your lender to explore ways to minimise the costs or speed up the process of discharging your mortgage. 

With Joust, good customers are now able to choose from some of the best banks in Australia – who will battle for your home loan with their best rates.

Once you complete an auction of your home loan on Joust and declare a winning bank, your new bank will complete the switching process with you. 

Myth 2:  A home loan is a difficult and long process!

Buying a house is one of the biggest decisions in life, choosing a home loan isn’t! 

A good home loan customer can think of a mortgage much like petrol! There’s plenty of choices out there and it doesn’t really matter where you get it from. What matters to most customers is the price at the pump.  The same logic can be applied to choosing a bank for your mortgage.

Over the past 30 years, banks have intentionally created a perception around the home loan process being difficult, confusing, long and extremely complex.  The reality is that for good quality customers, the process is actually quite straight forward.

Joust removes complexity from the home loan process by insisting that the bank’s bid based on its best rate.  This means home loan borrowers don’t get distracted by a myriad of unhelpful and irrelevant “specials,” packages” and “features.”  Joust takes away all the running around and research for customers – allowing you to simply submit your home loan profile online and sit back and watch the banks battle in a genuine auction experience on your mobile device.  Then, with a single click – you can choose the winning bank.

Myth 3:   I need a mortgage broker to get a good deal on a home loan

Out of the three myths that we have discussed, there is no greater myth than you need a mortgage broker to get a good deal on a home loan. 

An intermediary or a “middle man” is a popular option in today’s society, but one that often comes with a hidden expense.  Mortgage brokers who act as a middle man between a customer and their home loan deal don’t charge the client directly, however they make their money through large front-end fees and trail commissions.  Increasingly, there is independent research and public investigations that suggest that the home loan a mortgage broker recommends to you, may not always be in “your” best interest.

By auctioning your home loan business on Joust, you: 

  • Can be confident that you’re getting the best rate relevant to your profile. 
  • If you have an attractive home loan profile for lenders, then banks are likely to bid aggressively for your loan.
  • Then, you can select the lender and home loan rate that you want. 

Hopefully, busting these myths can shed some light on the dark secrets and some of the mysteries within the financial service industry.

Take control of your home loan journey and watch banks bid “live” for your business.