Because it was back in their day that a bank not passing on a rate cut was almost the rule, rather than the exception.

And with interest rates getting up to eighteen percent around that time, that was a whole lot of sweat going on!

So that generation can certainly add some perspective to what’s happening in the current times.

But there is one difference now. Thanks to competitors such as non-bank lenders, credit unions and building societies continuing to be a force in the mortgage marketplace, rate cuts are now more routinely passed on in full to borrowers.

And the reality is, this pattern now is largely due to the continuing existence of alternative lenders, combined with people exercising their right to choose.

After the 1990’s, benchmark rates came down by almost two percent after non-bank lenders such as Resi entered the market and have remained lower largely because our sector of the market continues to be around.

Sure – the big banks will continued to be pressured, whether it’s by government, borrowers or through the existence of other alternative lenders to more carefully consider their decision on rates, so that won’t change.

But at the end of the day, borrowers are now in a position where if they don’t like what’s happening, they can take their bat and ball and… move.

At first glance the reforms appear to address some of the impediments that borrowers dislike the most, such as abolishing exit fees completely. However, when we look at whether that will that actually improve general borrowing conditions – the answer is probably not.

What it will probably lead to is what the retail industry refers to as ‘merchandising’ where money lost in one area will be made up on other items – in other words, those exit fees will somehow find their way into other fees and features within the structure of a home loan.

The other key point is that abolishing exit fees doesn’t address the issue of banks raising their rates above official rate increases and outside of official rate cycles. So we’ll stay tuned for announcements on that one.

There is much in the official government media release about empowering the consumer – which is great. Because that’s what our non-bank sector has already being doing for the last twenty years as part of our service proposition and the reason why so many non-bank borrowers have been able to achieve the great Australian dream of property ownership.

So perhaps now the Federal Government has recognised that empowerment leads to a more robust industry it will continue to look at ways in which it can take our ball and run with it.

A dedicated national consumer awareness campaign on the banking system is a must and a particular issue that we at Resi have been vocal on and lobbying government to have for the past few years.

With our banking system virtually unrecognisable from where it was twenty years ago after deregulation, a key area of support that was sorely lacking at the time that the non-bank industry emerged was education and awareness for consumers on the new lending paradigm – and what it could provide.

Therefore, a comprehensive campaign is obviously long overdue but must include consultation with key players in our sector, such as Resi, if it is to have real credence within the industry – and in the community.

In terms of other reforms mentioned in yesterday’s package were several measures designed to improve the structure of and access to wholesale funding markets in Australia – which are playing an increasingly vital role in the mortgage industry.

Again – it seems to be welcome news, but we’ll reserve further comment until we can see more detail as these initiatives are developed.

And as for building a new pillar in the banking system for lenders outside of the big four – in theory it sounds like the Master Builder’s approach to making a structure stronger, but whatever measures are eventually introduced will at any rate, need much time to develop to their full strength.

So in the meantime until we wait for more detail, borrowers must continue to use their initiative to take a good look around at what’s currently on offer, understand there is a range of very appealing options outside of the big four banks – and exercise their right to choose what’s most appropriate for them.

And ironically this was the year before the banking industry in Australia was deregulated and the mortgage sector then opened up to allow borrowers access to a much more competitive market.

After 1983, borrowers indeed found themselves asking should we stay with what we know, or should we look elsewhere.  And now, here are borrowers more than twenty years on, once again asking themselves the same question.

So during the extraordinary events of the past week, this is what I put to those borrowers.

A lot has happened over the last twenty years and it’s now no longer just about what rate you’re getting.

Yes – hiking rates up well beyond official rate rises is not doing anyone any favours – least of all the borrower. And certainly all fees have come into the equation as well. But what many commentators and industry pundits are not also mentioning is the difference that a lender’s service proposition can make to preserve and improve a borrower’s situation.

And that’s something that non-bank lenders and mortgage brokers understand. In fact, the emergence of these players into the market redefined the way in which business was done with mortgage customers, by not only lowering rates but returning personal service back to the market and customising solutions to suit.

So my question to borrowers at the moment is this….

Sure, look at your rate and continue to monitor how that’s tracking with the rest of the market – but just as importantly, ask yourself what level of service you’re getting for parting with your hard earned cash.

Pick up the phone – talk to your lender and ask what more can be done to improve your situation – and then you’ll be a little further along to finding out how much they really value your business.

So stop now and ask yourself, have you taken the time to do some homework and find out more about who’s actually going to lend you that money? Because if you haven’t yet considered this, there’s no better time than now to find out why its so important.

By conducting some initial research, you can find out quite a bit about the way a lender does business and avoid any unnecessary concerns that might otherwise arise during the course of the relationship.

Because it’s important for you to understand when you sign up with a lender – you’re not just buying the product, but the service as well.  

Where a loan may look good on paper, you also need to be able to rely on the right lending representative to guide you through all the mechanics of the loan to ensure you continue to get the most out of your lender, your loan and the relationship.

And although education is a powerful tool – not every lender is willing to make the time and effort to help empower you over time to take more ownership of your financial decisions.

So before taking out a home loan, there’s some simple checks you can make. These include:

Visiting the lender’s website

By doing this you can establish how long they’ve been in business, products they offer, interest rates, industry memberships and the people behind the business and its history.

Asking around

A good way to measure the quality of a company’s products and services are through word of mouth. Ask a broad range of friends, family and business associates if they’ve had dealings with the company you’re considering, and if so, how they found the experience.

Obtain a copy of the credit contract for your loan

By doing this you can look at the terms of the loan and your obligations to determine if you will be able to meet them. The credit contract will also outline any fees associated with changing loans – and if you do have any concerns, seek some independent legal and financial advice.

Organise a face-to-face meeting with a company representative

After conducting some preliminary research, set up a meeting with a lender from your organisation of choice. Come armed with any questions and queries your earlier research may have unearthed.

Check that the lender is a member of the Credit Ombudsman Service Limited (COSL)

This service protects the rights of any borrowers who deal with a COSL member and allows them to take a complaint they may have against that lender to an independent dispute resolution body. 

And finally – if you don’t feel comfortable with the direction your lender is taking you, don’t sign on the dotted line. There are many good lenders out there and the buck really does stop with you.

In case you haven’t noticed – there’s a pattern emerging in the world of business and politics where women are slowly, but surely, starting to take centre stage.

And that pattern has also transcended into the world of finance in terms of women empowering themselves in the ways of the property market.

In fact, unlike many previous generations, women are now a force to be reckoned with in the consumer economy and these days are overlooked by lenders at their own peril!

Growing numbers of women have over the last two decades since industry deregulation taken advantage of low home loan interest rates and more readily available loans to buy their own homes or make property the foundation of their investment strategy.

And its simple to see why – women are no longer waiting for Mr Right to come along before buying their first home, but are turning instead to investment in bricks and mortar to help secure their financial future.

So whether you are married or single, how do you take the first steps in preparing to become a ‘woman of independent means’?

FIRSTLY: you need to look at your income and set your expectations accordingly. And then be prepared that you may even have to lower those expectations in order to enter the property market. Because although too many people these days seem to want it all straight away, as the main breadwinner you don’t fall into the trap of thinking you have to have it all – and have it now.

SECONDLY: get rid of any personal debt with the aid of a realistic budget. Consider consolidating any credit card debts into one lower interest personal loan and once this has been paid off, then start saving in earnest.

FINALLY: shop around for the best loan and the best lender. There are so many loan products to suit first home buyers, including single women. Explore different avenues, such as the size of the deposit you really need, assistance from government grants, and whether you could buy in with family or friends just to get your toe in the door. And look for a lender that genuinely has your best interests at heart – and isn’t just after a sale. Ask around and do your own research.

The possibilities are endless and property ownership can be an exciting path to travel on – as long as you continue to check you’re still on the best possible track and remain committed to reaching your end destination.

With some lenders passing on rate rises outside of the RBA cycle, finding a bargain standard variable interest rate (SVR) is now a little more challenging.

However when you compare the current SVR of the big four banks against other lenders such as non-banks, credit unions and building societies, the difference in most cases still remains largely in favour of lenders outside the banks who can still offer rates which on average are around .50% lower.

But despite this, some mortgage providers are still advertising rates even lower than that and well below that of the big four banks, which should make you ask questions about how this rate can be offered in the first place and then how it will be sustained.

It’s understandable that the propensity for borrowers to look for the lowest rate will remain for some time, due to the fact that we’re still considerably geared in terms of what we owe – but whatever deal catches your eye, you need to read the fine print and ask questions first before you sign anything.

There are a few basic principles to remember when you’re hunting around for a better deal:

HOW DOES THE RATE COMPARE TO THE MARKET?

Identify if the interest rate sits within the most common standard variable interest rate band in the marketplace i.e. around that of the big four banks and key non-banks. If the rate you are looking at is substantially lower, it should be enough to make you dig a little deeper.

A good place to start is by going to websites such as www.infochoice.com.au, www.cannex.com.au or www.ratecity.com.au where the most up-to-date rates are generally shown.  Then once you find a rate and a loan you think is appropriate for your circumstances, go to that specific mortgage provider’s website and check if the information is consistent.

LOOK AT THE COMPARISON RATE?

Don’t be taken in by the annual percentage rate only – you must read the comparison rate as an indication of the loan’s total cost. You may find fees and charges that didn’t factor into the headline rate. The difference once this is taken into account, may make the perceived savings on a low rate negligible, even within the first year.

WHAT WILL HAPPEN WITH THE RATE IN THE FUTURE?

If an advertised interest rate is unusually low then you need to seek some kind of guarantee that further rate rises will reflect the movements from other similar providers in order to give you comfort and confidence to move forward with the product. Without this guarantee you may find the rate increasing substantially outside of the RBA cycle.

WHAT IS THE  SERVICE PROPOSITION?

Because borrowers are so generally rate focused, it’s important to remember not to neglect the other key aspects of obtaining a loan that can also save money and time including the features of the loan and the standard of service provided by the lender.

Check out how much you can save with Resi on the Mozo website. http://bit.ly/cjo5R2

Whilst it’s common for many borrowers to occasionally feel frustrated by their mortgage, it is another thing altogether to determine whether it’s financially worth acting and the time is right to move to greener pastures.

The main issue for borrowers is taking time out to look around and see what else is available and many times this doesn’t happen until someone tells you what a good deal they’re on – and it stirs you into action.

But there are several triggers that you can identify prior to reaching this point:

1. When you look at comparable loans, is your rate still competitive?
2. When you look at your loan features, are they still suitable for your current circumstances or are  you paying for features you don’t need anymore?
3. Are you satisfied with the level of customer service with your lender? Do they know you personally enough to provide direction to you on reaching your financial goals – or do you feel like just another customer?
4. When you do hear good stories about other lenders and loan options, are you constantly  feeling  like you have nothing to brag about in relation to your own?

The critical step then is to look at the break costs on your current loan to calculate if switching loans is financially worth it.

If there is a break cost you need to see if it can be easily recouped with the interest you will save over the first few months of taking out a new loan.

Now that Australia is in a rising rate environment and there is more competition between lenders for a borrower’s business, the incentive to refinance is significantly greater than it was two years ago when the mortgage landscape was dramatically different.

However, the stumbling block for many mortgage holders is that they’re so busy juggling their finances they don’t take the time instead to think about whether they can change the actual terms of those finances to make the juggle easier.

A borrower only has to consider what benefits they can gain from refinancing i.e. potentially saving tens of thousands of dollars in interest over the life of a loan and giving them more flexibility over their household cash-flow to convince them that the time may be right.

Just like shopping centres give you a centralised place to compare prices sales and deals for clothes, most people would like a one-stop loan shop to provide opportunity for you to compare and contrast the loan products that best suit your situation. 

There are a lot of websites out there that provide an abundance of information to guide you through the home loan maze but they also report on competition in the home loan industry. Websites such as Info Choice, Rate City, Your Mortgage and Your Investment Property are good places to start.

Other websites which have only been available in the past year or two and also worth a visit are Mozo, Money Buddy and Home Loan Hints. Also check out Resi’s informative videos on My Home.

Also, don’t forget to flick through the financial and property sections of your weekly paper.  This is usually a good starting point for your research into the right home loan for you.  Your national paper will also have an abundance of budgeting tips and market news and can give you an idea of how much houses are selling for in your area of interest.