Loyalty penalty costs borrowers billions
It’s a common belief that it pays to be loyal, but when it comes to your home loan, it seems like loyalty makes us pay more. Billions of dollars more, if online lender Athena’s new analysis is correct.
Athena’s analysis of Reserve Bank data suggests Australian mortgage holders have disbursed around $ 9 billion in loyalty penalties so far in 2021. According to Athena CEO Nathan Walsh, this is due to the fact that new home loan customers enjoy better rates than existing customers.
As big as that $ 9 billion figure is, it’s even more mind-boggling on an individual level. Athena’s figures reveal that the loyalty penalty could see the typical borrower with a $ 400,000 loan paying $ 37,462 more in interest over the life of the loan – or $ 1,249 more per year.
“Australian homeowners feel their lender is taking advantage and are fed up with it,” Walsh said. “The loyalty penalty costs customers billions of dollars a year. We believe it is time for this practice to end, and the owners agree.
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