Home Loans: Are Choice being paid by the banks to do promos?

I came across an article about home loans recently that said

If you want a better home loan interest rate, just ask your bank. Apparently the information was supplied by Choice, a Consumer adviser Group. What a load of bull.

This home loan advice from Choice is just plain wrong advice on many levels.

1. If you can get a lower home loan interest rate just by asking, what does that tell you about the bank? Its ripping all their clients off! So why would you continue to do business with them at all? As an analogy, if you discovered your baker was taking a slice out of every loaf he sold you for the last two years, would you be happy if he just said he would stop robbing you from now on? No. So why does this logic not apply to home loans?
2. If there is a better home loan interest rate on offer to you today, why was it not there yesterday, any should be available for everyone?
3. If there is a Lower home loan interest rate for you, why not another customer, why not all the banks customers?
4. The banks, Westpac, ANZ, CBA and NAB that make these home loan savings claims are the same ones who have been saying for months that they need to up their interest rates above the RBA increases because their margins have been eroded. So why is the lie, the one that they need more profits, or the one that they need less profits?

Here’s my advise. if the bank has been ripping you off with high home loan interest rates, eave that bank. Never reward someone who is robbing you.

Mickey Mouse Home Loan Interest Rate Survey

It turns out this Mickey Mouse Choice Survey was from its own members! It was not done in any scientific way, but is past off as good advice for general consumers.
Another interest rise is on the cards, and these same banks want to slip in an extra rate on top of the Reserve Banks increase so you won’t complain it or associate it the greedy bank tag.
This method of marketing is called skimming. You take the most money you can off people, and the ones that threaten to leave, you offer the right rate to stay. What about getting a refund of all the extra interest that these greedy banks have robbed your of all these years? What’s the point of being a member if its the members who supply the advise? Why can’t a bank recruit staff to become members and distort the “surveys” for its own ends?
What makes these claims even more outrageous is that they are made by Choice, the so called consumer adviser. Most of the advise I have seen from choice has been suspect and the opposite of choice, but the reverse of choice, preventing you from choosing, staying as you are.

Mr Mortgage advises That if your bank has been ripping you off on home loan interest rates, and when you find out it offers a lower interest rate, don’t get mad, get even. Pull your business and go elsewhere. Never reward any lender for duding you.

Is Choice just a front for Big Brands Advertising in the guise of a consumer adviser?

I am beginning to wonder! This claim about home loans interest rate savings is but one example of  similar stories I have seen them do. They never seem to cover all the range or offers that there are, just a “limited choice”.

It makes me think that Choice might be taking kick backs from the big Banks to do promotions for them. Why else would they be so irresponsable and sloppy?

Don’t listen to Choice. Go to a new lender who will give you a better home loan rate without the round-a-round.

The fact is you can better a deal deal from non bank lenders and so Choice should be recommending their members to switch their mortgages to a non bank lender, instead of supporting skimming lenders like these Big Banks are suggested as in the article.

Summary on saving home loan Interest rates

Remember if you ask your lender for a rate cut and they give you one, then you were being ripped off, and you should leave that bank immediately and take your business elsewhere , and ask that they refund you the excess rates they have charged you from the loans inception. That could be a major or regional bank, a credit union, or building society, or it could be a non bank lender.
Author: Rick Adlam,  Mr Mortgage

About: Rick Adlam: Rick Adlam has been helping clients with home loan finance since 1985 when he was home consultant with AV Jennings. Rick started Equity Home Loans in 1996 to help homeowners become property investors. Rick currently consults in the development of Mr Mortgage for mortgage brokers and HomeMate for new home buyers. Website: http://www.mrmortgage.com.au