In New Zealand we have a number of banks and when you see them all advertising they all look much the same.
They all say they will provide home loans with similar deposits and similar interest rates.
They all seem similar and are even have their bank branches located next to each other.
But if they are all the same then why do we need more than one bank?
The Banks Are Not The Same
Lots of Kiwi’s will speak to their bank (the bank they have their accounts with) and maybe they think “their bank” will be able to offer the same as the bank down the road. Maybe they even think that “their bank” will offer them something better as they are valued customers.
But that is really not the case.
While the banks may look similar, they are all competing and trying to be as profitable as possible.
For this reason they may create some different policy.
Last week one our mortgage broker Clive Brumby was working with a lady to source her a home loan for her first home.
The house she wanted to purchase was not an expensive place and she had a good sized deposit.
She was a single lady and therefore had just her income, but she also planned to get a boarder to help with covering the costs.
She had approached “her bank” which offered her a home loan for a maximum of $285,000 which was not enough.
Clive assessed the application and determined that there was another bank that could do better. He submitted the application to another bank and managed to get her a home loan of $355,000 which allowed her to move ahead with the purchase of her first home.
That was an extra $70,000 or almost 25% more!
It was a great success story for this lady and confirmed there are good reasons to use mortgage brokers.
If banks were all the same there would be no need for multiple banks and mortgage brokers would not need to offer a choice of banks either.
Mortgage brokers offer choice.
Find A Bank That Suits Your Situation
So while banks may look similar they are all different.
If you want to find a bank that suits your situation or you just want to make sure that you have the right options you could approach all the banks and find out what they will offer, and analyse the loan offers to see how they differ.
Or you could contact a mortgage broker and get advice from them.
Mortgage brokers offer choice as they have access to a range of banks and non bank lenders so can offer choice.
If you have more than one property they may even recommend that you split your loans across more than one bank.
Why would you go to “your bank” when a mortgage broker knows what the various banks offer and can offer you advice on which one might suit best?