John and Sue are ready to get on the property ladder and they're doing their homework. That means shopping around the big banks, and exploring a lesser-known option as well – borrowing from a customer owned banked.
How do they fare? You might be surprised by how much the home loan process really varies.
Haggling with the big banks
At first, John and Sue are mystified by some of big banks' offers. Promises of shorter repayment periods and low deposit loans seem too good to be true. That's when the couple starts to think: maybe they are. Big banks are out there to make a profit, so they constantly peddle products that look attractive, but cost you in the long run. Australia's Big Four didn't become some of the most profitable banks in the world by saving their customers any money.
Their main goal is to make a profit, not to look after their members.
While they aren't crazy about the loans themselves, John and Sue are really bothered by the poor service. Big banks are known for being impersonal and isolating their customers. Their main goal is to make a profit, not to look after members. Deemed 'too big to fail', major banks aren't concerned with keeping your business, so they often have tougher requirements and inflexible lending options.
After a chastening experience with the big guys, John and Sue start to feel a bit disheartened.
Getting it right with a credit union
That's when they go to check out a small, customer owned credit union. From beginning to end, these first home buyers find that the process is starkly different.
Here are the distinctions they notice right away:
- A heightened level of personal service
- No hidden fees
- Competitive rates
- More straightforward products
- A flexible approach
Why such a shift in service? Here are two main factors allow credit unions to offer better, more personalised home loans.
- Credit unions return profits to members
- Credit unions are customer owned
Because credit unions aren't out there to make a massive profit to pay dividends to shareholders, there are no hidden fees and interest they can afford to offer loans with lower interest rates. Don't believe us? See how CAPE's rates stack up to our competitors. They also pass on savings to their members, whereas major banks are constantly trying to make money for investors.
Customer ownership means credit unions operate within their members' best interests. They want to provide you the best service possible, and they also won't sell you a loan you can't afford to pay back.
If customer service is your priority, working with a credit union is your best bet whether you're a first home buyer or a seasoned investor. Keen to give us a try? Reach out to our expert team today.