Interest rates may be at record lows but borrowers must remember this should not be the deciding factor in choosing the best mortgage product, according to the industry’s peak body for finance brokers.
Peter White from the Finance Brokers Association of Australia says there has been much talk about cheap loan money but wants to remind borrowers to carefully assess their current and future financial needs.
“The banks are competing to offer the cheapest interest rate but it’s a case of buyer beware because responsible lending is not done through bidding, auction or search engine sites,” he warned.
The 37-year finance industry veteran said professional guidance from a finance broker is essential to ensure the loan is “not unsuitable” to the customer, not just for now but when circumstances change.”
“You may be on a lower variable rate, but in some cases it may be prudent to fix part of your mortgage. This is when the right advice is essential.
“Brokers are accredited professionals who know the market inside out and possess the experience to ascertain a loan that meets – if not exceeds – your needs, which in many cases does not necessarily mean the cheapest.
“In fact, finance brokers are obligated through legislation to adhere to responsible lending practices” he explained.
Mr White said finance broking is one of the country’s most regulated finance sectors, offering full transparency about the loan product as well as fees and charges.