Abandoning major banks could save borrowers $5.3b

Big four customers could save $5.3 billion on their home loans each year by switching to the cheapest provider.

According to Infochoice’s first quarterly cost-of-banking report, mortgage customers could save $3,186 a year in interest repayments by switching from the 5.78 per cent average variable rate for the four majors to the 4.92 per cent average rate for the lowest four mortgage facilities.

“The real anomaly is that, while the four major banks offer increasingly less competitive products, they continue to increase their market share,” Infochoice chief executive Shaun Cornelius said.

According to Mr Cornelius, there is no logical reason for customers to stay with one of the big four banks.

“The majors have trusted brands and there’s been a flight to perceived quality in the financial crisis, but Australia has always had a strong banking system, and the guarantee is in place,” he said.

Big four customers could save $5.3 billion on their home loans each year by switching to the cheapest provider.

According to Infochoice’s first quarterly cost-of-banking report, mortgage customers could save $3,186 a year in interest repayments by switching from the 5.78 per cent average variable rate for the four majors to the 4.92 per cent average rate for the lowest four mortgage facilities.

“The real anomaly is that, while the four major banks offer increasingly less competitive products, they continue to increase their market share,” Infochoice chief executive Shaun Cornelius said.

According to Mr Cornelius, there is no logical reason for customers to stay with one of the big four banks.

“The majors have trusted brands and there’s been a flight to perceived quality in the financial crisis, but Australia has always had a strong banking system, and the guarantee is in place,” he said.

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