Levelling the home loan playing field: Uno Home Loans

EXPERT OBSERVER

Ask a homeowner how long it took them to fill out their home loan or refinancing applications and, chances are, you’ll get an exasperated “12 hours” as a response – even when the reality is more like two hours.      

The way Australian consumers interact with the property market is shifting, with savvy consumers looking for new ways to get on and climb up the property ladder. But one thing that never seems to change is the ‘grudge’ element of the application process, or the anxiety that a home loan can bestow on a household.

Navigating the shifting lending landscape

Housing affordability is a top concern for most Australians, second only to cost of living and health and ageing. Three quarters (75%) of consumers say home ownership feels more difficult than 10 years ago, and 59% expect it to be even more difficult in another 10 years.

This concern is understandable in the face of harsher scrutiny of financial liabilities, more stringent income and expenditure requirements and stricter credit criteria from banks and lenders. And the anxiety of buying or refinancing doesn’t end when homeowners get their loan approved – consumers are bombarded everyday with so many offers, deals and financial life hacks that it’s almost impossible for them to be sure they’re on the best rate.

As the dreams of owning, renovating or upsizing a home become more challenging, consumers are looking to looking for alternative financial partners, who are keeping in step with the shifting lending landscape and offering innovative new products, more flexibility and competitive rates. 

These partners are increasingly non-bank lenders (online lenders, neobanks and credit unions) with better fees, lower rates and a more personalised service compared to established mortgage lenders, who are failing to keep up with changing consumer needs.

How are customers forging the future of home ownership?

The reality is, everyday families have always been underserviced – becauseof their geographical location, not having the levels of wealth that demand personal attention, or simply because their broker or lender doesn’t contact them regularly enough. Unfortunately for this group of consumers, while they’ve been largely ignored by their banks and lenders, they’ve also been wasting a collective $4bn a year on unnecessary home loan interest payments.

The only way to level the playing field is for the consumer to take back control. Consumers who have stayed on the same loan for years are being hardest hit by the ‘loyalty tax’, while new or more proactive customers are offered more attractive loans. This group would greatly benefit from refinancing – but most people don’t have the time, knowledge or energy to monitor the markets every day to make sure they’re still getting the best deal.

This is where technology comes into play. The advent of fintech has not only started levelling the playing field, it’s also made homeowners more aware of what they’re missing out on. Slowly but surely, uno is seeing consumers trying to take a more active role, refinancing more often and trying to counteract their financial anxiety.

This is a huge task for consumers to take on alone. Luckily, they don’t have to. uno’s loanScore tool, for example, gives consumers free access to the same kind of service a personal banker would provide – assessing their loans in real time, letting them know where they stand and making it easier to act when they’re ready. Essentially removing the anxiety of not knowing whether you’re on the right deal, for the entire life of the loan.

For established players, ignoring the changing attitudes and behaviours of consumers won’t remain an option for long. For new entrants, opportunities abound.  

Anthony Justice is the CEO of uno Home Loans.