Major Banks Vs the smaller guys

It’s no secret that major banks rely largely on branding and customer loyalty to grow their business and turn a healthy profit – what’s not so well known is how the smaller guys operate.

Generally when shopping around for a great deal on your mortgage, the first port of call will often be to go to the bank you’ve been with for decades on the belief that they will look after you and give you the best home loan deal. Many will stop there and be happy with the options provided – and given the sheer dominance they have, in many cases this is one of the big four banks.

Smart shoppers will go a little further and perhaps shop around with the other major lenders to see what they have to offer. This sounds like a smart idea, but what you will often find is that the big four banks generally have very similar pricing structures. After all, they’re competing against each other, so they will use each other as a benchmark for where they need to set their pricing. In many cases, even if another lender offers you a slightly better deal, the chances are it’s easier to stick with your current bank so that you don’t have to set up new bank accounts and deal with switching banks, and for the sake of a some small savings, why would you?

BUT… This is where the savvy home owner or buyer can really win out. Second tier lenders, regional banks and smaller mortgage lenders all play in a very difference space. Whilst the big banks have large infrastructures, high over heads, huge marketing budgets and great brand recognition, the smaller guys tend to rely largely on offering something different to the client. They focus on offering a great overall customer experience and a very competitive package. They don’t have a massive branch network, high overheads and huge marketing budgets. They know they cannot compete with the larger banks in that space, and they know that in order to win over your business they need to be not just a little more competitive, but far more competitive.

Are you paying too much for your mortgage? Check out this video on lender loyalty and find out if your bank is looking after you!

Additionally, many of the smaller banks and mortgage lenders often rely on the mortgage broker network to get their offer in front of their potential clients – so this provides further motivation for them to be a clear winner when it comes to their competitive offer – after all, a mortgage broker is seeking to save their client as much as possible so that they offer value themselves.

As a mortgage broker myself I have a lot of faith in the smaller lenders, time and time again they prove to be the far better options and are hard to beat on pricing. Some of them will have branch networks, some of them won’t – but really, when was the last time you went in to the bank to talk about your home loan? Unless you’re making changes to your home loan there really isn’t a great need to visit a branch, and if you have a mortgage broker looking after you then you really never need to go in to a branch – so why pay more to have access to branches you’ll never use! ATMs are everywhere and most of the smaller lenders have access to many of the major ATM networks.

Bottom line here is do your homework – or better yet speak with a mortgage broker and let them do the home work for you. Mortgage brokers will have access to many reputable lenders you didn’t even know exist because they simply don’t need to advertise!

Contact Emanate Finance today and let’s have a chat about your options.

Watch this video to find out if bank loyalty really pays off;