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How ratings and awards can help you choose a better home loan

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Mozo director, Kirsty Lamont, and Canstar’s Group Executive, Financial Services, Steve Mickenbecker, reveal how they choose winning home loans so you can too.

Knowing your home loan has been assessed by independent experts can boost your confidence when comparing the best home lenders in Australia.

Since 2014, Qudos Bank has been a consistent winner across both Canstar and Mozo. In 2019, we won the Mozo Experts Choice Award for Packaged Home Loan - Low Cost Home Loan (Value Package), a Canstar 5 Star Rating for Fixed Rate Home Loan - Owner Occupied, and a Canstar 5 Star Rating Outstanding Value Home Lender.

But how are winning products chosen? And can the awards help you choose the best home loan rates?

How does it work?

Hundreds of home loans are put to the test every year. In 2019, Mozo assessed 436 home loans from 85 lenders. “The lenders Mozo evaluate don’t ‘enter’ the Mozo Experts Choice Awards or pay to be considered,” Kirsty explains. “A team of experts analyse masses of product data to find worthy candidates for the best home loan interest rates.”

At Canstar, workshops are run with industry experts to discuss how products will be assessed according to what’s happening with the market. “We don’t accept money for entry into the ratings system and winning companies aren’t told they’ve won until the process is finished,” Steve revealed.

Winning lenders are then given the opportunity to pay a licensing fee to use the awards’ badges in their marketing.

What are the ratings’ criteria?

Both companies have a similar process in assessing the best mortgages in Australia. Of the hundreds of loans assessed, 5-star ratings are given to the top 10% in different categories. There are also winners in each category.

Canstar looks at a combination of cost and features. “Products that land in the top 10% must be reasonably priced, weighted against features. It has to be value for money. A really expensive product would never get a 5-star rating,” Steve says “The consumer is built into the process. To get the accolade, you have to perform strongly across different customer profiles in most of the market.”

Mozo has a different measuring system. “For Mozo’s home loan awards, it’s about finding the lowest cost loans for a given set of features. We calculate the total cost of each loan for a set of typical customers. If it’s among the best value products of its type, it’s a winner”, explains Kristy.

How can you best use awards and ratings to help you find the right loan?

“Use the awards as a shortlist generator,” Steve advises. “Look at those four or five products and start your shopping there. Does it have everything you need? Do you qualify? Then do more research. Visit the company website. Is there anything you’re not sure about? Call them. Do your homework and don’t rely totally on us. If you have an existing loan, our website has 800 products you can evaluate to see if you can get a better deal.”

Kirsty’s advice is to make sure you understand which loans offer great value. “Choosing a home loan is one of the biggest financial decisions most people will make,” she says. “So it’s vital to get it right. Choose a loan with the right features and flexibility for your situation. By highlighting the best loans on the market, we give borrowers the confidence to look beyond the big banks and consider smaller lenders, such as Qudos Bank, that can often offer better value.”

Finding the right home loan can be challenging given the mountain of lenders and rates available, so it’s worth using the ratings and awards as a starting point for your journey. It could mean saving tens of thousands of dollars in interest over the life of your loan.

See all of our awards

 

  Disclaimer:

Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305. The information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances.

 

Article published May 2019