David Hyman
CEO, Lendi Group
David Hyman is the CEO of Lendi Group, the leading branded distributor of home loans in the market, housing both the Lendi, Aussie and Domain Home Loans brands. Over nine years ago, David co-founded Lendi - one of the fastest growing fintech groups globally with a mission to change the way Australians get home loans by disrupting the status quo in the mortgage market using technology.
David's tips for how to save money in the rising interest rate market
In the current climate with interest rates being passed on in quick order and successively we want people to avoid un-needed mortgage stress, particularly with the rising costs of living. Some homeowners have taken early steps to refinance following the RBA’s cash rate increases during 2022.
However, the majority of Australian mortgage holders remain either passive about the interest rate increases or loyal to their current lender. This loyalty is often costing customers money, given the ‘loyalty tax,’ wherein banks and lenders prioritise new business and penalise existing clients. There are significant savings consumers could make by revisiting their loan and challenging lender loyalty.
Lendi data shows that on average banks are charging new customers rates that are 86 basis points (bps) lower than rates charged to existing customers, while the Big 4 are charging 91bps less for new customers. On a $500,000 loan, lender loyalty means mortgage holders could be missing out on very significant savings, approximately $70,000 over the life of the loan ($238 per month), increasing to $106,000 ($357 per month) on a $750,000 loan, and saving up to $140,000 ($475 per month) on a $1,000,000 loan.
This data shows all Australians with a mortgage should be actively interrogating their loan, seeking alternative options and taking action to help manage the increasing costs of living. The rising cash rate should be a strong impetus for borrowers to act now and start the refinance conversation, and in turn save on their lender loyalty tax. Homeowners can also calculate their potential savings by using
Lendi’s free online repayment calculators.
For homeowners considering their options, reaching out to a local mortgage broker is a great place to start. Brokers are experts in finding and securing competitive rates and offering a personalised approach to meet their client’s needs.
1 Sourced from home loan calculators across 28 lenders on the Lendi platform.