Cash for Loans

Reporter: Laticia Gibson

It's a global credit squeeze pushing repossession to record highs.The average standard variable rate has ballooned but Aussie John has made a commitment to homeowners... extending the mortgage challenge another month.

"Never before is it more necessary to have a look at your financial affairs because we have borrowed too much. Our consumer personal debt levels have gone up 400% in the past 20 years - do something about it" says Aussie John. But if you think it's a quick way to get $300 in your wallet then think again... 99% of challengers walked away with a saving.

"In most cases consumers are saving as much as, or on average 1 per cent interest rate. Now on a $200, $300, $400,000 home loan.... that literally means a hundred, two hundred thousand savings."It's great PR but if it works can help home owners save, then what's the harm?

With a simple visit from an Aussie advisor, they scour through thousands of loan options. By analysing interest rates, exits fees and charges through special software, it ensures you get the best deal available at that time. After a refinancing disaster a few years back, Caroline and Warren Moore are living proof.

"We started a business at the same time as buying the house so we didn't have the right income statements to get a normal loan so we had to get a low-doc loan... They penalised us for that. They said the interest rate they were putting us on was one per cent higher than everyone else" says the couple. After years of fearful deliberation it was Aussies' deal that made them act... a decision that will save them years off the life of their loan. "We're going to be saving $340 a month. Our interest rate will be 8.75% opposed to 10.04% - so it gives me a better feeling."

Home-buyers have the highest interest rates and stamp duty in the western world. What's worse, we're often held hostage by exit fees up to 3% of the total loan. Despite this, the banks say the charges should stay claiming they're fair. Not a thought shared by consumers. The 2006 Census found one in three homeowners had paid off their mortgage... Patrick and Joan Richards determined to join that group and take the power back from the banks. "When you retire you go onto a pension. If you haven't, don't own your home and you're paying off this, that and the other - you've got no hope."

The couple sought alternatives with an Aussie broker. Rolling three debts worth $606,000 into one; at an interest rate of 8.75% - will save them $207,000 over the life of the loan. "It does send a message to the banks because it means people are going to have a harder look at their interest rates on their home loans and we are finding that there are interest rates out there that are over 10 % and that's just not on" says Aussie Home Loans.