Michael Lee explains what flongle does to Stuart Bocking with Your Business Day on 2UE. Click to listen.
About The Mortgage Competition Case Study:
Mick sights a real life case study of a recent contest analysed over the next 5 years:
If the Borrower stays where they are will pay; $ 68,877
Borrower switches to a new deal: $ 60,729
Total possible saving: $ 8,148
The borrower does not take a backward step in either loan or lender quality and both their new loan and the old one includes an offset account.
3 Important Points
Mick makes three statements which should be corrected/explained about this example:
- Mick says savings are around 10%. The correct figure is $8,148 / $68,877 x 100 so the correct saving over 5 years is 11.83%
- He says these real life contest savings are “pretty good”, but we think this saving is excellent.
- Mick says the borrower’s cost is less than $60,000, however it actually models to $60,729 which is still a big saving.
Assumptions:
This type of analysis is available for all contest results (including a range of exit points, not just 5 years) and in this case the assumptions are:
- Same loan term for new and old loan
- Same repayment type
- Same rate type
- Same loan features and lender quality
- Same monthly repayment for both loans (based on budgeted monthly repayment
- Based on current interest rates, fees, discounts and concessions.