More than half of mortgage holders unhappy with lenders, but most find switching too hard

Two out of five mortgage holders say it is still too hard to switch home loan providers, despite the ban on mortgage exit fees on variable loans being in place for almost five months, a poll by Galaxy Research has found.

While the poll found that more than half (54%) of Australian mortgage are unhappy with their current home loan, the vast majority of these (38%) consider it too hard to switch their home loan, despite knowing they could be in a better financial position as a result of switching providers.

Still, the results of the survey suggest lenders have a significant pool of dissatisfied mortgage holders who are ripe for changing lenders with the survey finding that 17% of borrowers are so dissatisfied that they plan to change their lender.

The survey was carried out in the two weeks following the RBA announced its 0.25% interest rate cut on November 2 on behalf of SwitchUp, a new online mortgage application service.

Galaxy polled more than 1,000 Australians in both capital cities and non-capital city areas. The respondents were aged 25 to 64, and all had either bought property in the last two years or intended to buy property in the next two years.

Jega Rajan, CEO of SwitchUp, says it is disappointed that only 46% of current mortgage holders are happy with their current loan.

“It’s a real shame that so few people are satisfied with their home loan, we’d like that to be higher. We want the Australian people to have enough clear information about the loan products available to make confident financial decisions,” he says.

SwitchUp claims to offer home loan comparison that go beyond just an interest rate including information about account features and fees and whether or not the consumer is eligible for the loan.

On July 1 the government banned mortgage exit fees, which can be as high as $7,000, on variable rate mortgages.