Customer loyalty is often rewarded in modern society. Use the same coffee shop every day and bag a free brew every eight or so purchases; stick with the same car insurer and you might score a preferential rate; shop at the same grocery store and rack up points each time you spend. Loyalty is everywhere – but is your lender rewarding you for your custom?
Over the twenty or thirty-year lifespan of your home loan, you might expect some gratitude from your bank for sticking around. Indeed, you may have been with your bank from a very young age (anyone remember Dollarmites in primary school!?), receiving your first EFTPOS card to save your paper-round cash. Yes, you might have a very long relationship with your banking institution, but that’s not to say your dedication is being rewarded. Routinely, it’s not. Whether you’re a new customer or you’ve banked with a financial institution for forty years, you’ll still need to jump through all the rigours to secure finance. There’s no shortcuts (or preferential treatment) when it comes to lending.
In actuality, the more information that a bank has on your prior behaviour as a customer – the more hesitant they are to work with you. Lenders make decisions based on data only – which is why it’s so critical to work with a broker who will assist you to present your data ‘best case’ to a matching financial institution. If your ‘family bank’ has decades of your financial behaviour on-tap, they’re compelled to look at the few times you didn’t make good on your mortgage or credit card repayment. To focus on those times your direct debits bounced. Unfortunately, familiarity can breed contempt (or at the very least, significant wariness) for banks.
It’s very rare for banks to lower a lifelong customer’s variable rate without significant mitigating factors being present, with many of the low rates publicly advertised aimed only at attracting new business. Working with a broker can increase your chances of garnering a ‘loyalty’ benefit from your financial institution, as their relationship with your bank (paired with their lending expertise, market knowledge and negotiation skills) have the potential to make a real difference to your application.
Working with a broker
Whether you’re looking for a home loan or considering refinancing, working with a broker ensures you’ll get the best outcome; it’s in a broker’s best interest to secure you the right loan. Experienced brokers will welcome collaborating with you to leverage loyalty with your existing financial institution – whilst also offering a variety of alternative lenders whose loans may be a better fit for your lifestyle and financial goals. Don’t discount exploring other financial institutions for your loan – remember, a bank having too much data about your financial history can sometimes work against you.
Hatch Financial Services have access to more than 25 different lenders. Pairing strategy with deep market insight, our team’s focus is solely on acquiring a loan that works in your favour and rewards you today and into the future. Whilst feeling loyal to your bank might feel like the right thing to do, make sure that you’re not being disadvantaged by your own good will!