Online Mortgage

Reporter: David Richardson

Switch and save, bundle and save, borrowers are constantly being told there's $5.3 billion in home loans they could be saving if they look around.

"I reckon I'm saving about $1700 a month" says Gerry Mueller. He was buckling under the pressure of his mortgage. "Initially it started at 15%, then it was reduced down to 11 because I'd been there for two years."Unhappy, Gerry tried a new service, an on-line broker who gets the banks to fight for your business it's called "Bid My Loan". Gerry is now paying 6.5%.

"We go to the banks on your behalf and we get you the best deal. It is like a brokering service, the difference is we haggle on your behalf" says Stephen Benton. Bid My Loan is the brainchild of former senior banker Stephen Benton. It's all done on-line but as a former bank executive, he knows the ins and outs, how to get the loans to come to the customer.

"Compared to standard mortgage rates from a bank we're saving people, say on a $400,000 loan, we're saving $40,000 or more over 20 years. It's around $200 a month which is a fair amount of money" adds Stephen. Newly weds Tejas and Vini wanted to borrow $350,000 for a new home, they've spent 12 months trying to get finance doing it themselves. "The best I could get after negotiating with the market agent was 6.34%. That was the best deal I could get" said Tejas. "I got 6.02%, you're saving a fair amount of money, especially for a first home buyer - you save about $100 a month."

"When we summed up the potential savings we came up with the number of about $6.1-billion per year" said Shaun Cornelius from InfoChoice. He first identified the money that could be saved by borrowers if they shopped around, or just switched banks, rather than being apathetic. "Average potential savings per customer we calculated at $3,800 per year." If these deals are so incredible you'd imagine people are rushing in to switch from bank to bank, they're not, only one in 3 home loan borrowers will even consider switching banks. The perception is it's not only costly it's just too hard.

Economics professor Steve Keen believes there are too many options, too much confusion for people to switch mortgage lenders which is why "Bid My Loan" and other on line auction style sites around the world have taken off - mortgage supermarkets - where banks have to work for you. "They bid for your business, if you're happy you say yes, otherwise you extend the auction and somebody else will bid for your business" says Tejas. "It's definitely worth looking around? Of course it is - if it's going to save you money! Saved me alot of money" adds Gerry.

FOR MORE INFORMATION:

INFOCHOICE

Website: www.infochoice.com.au

BID MY LOAN

Website: www.bidmyloan.com.au

Call 1300 BIDMYLOAN (1300 243 695)