Does Best Interest Duty Apply to Banks?
When it comes to the best interest duty and banks, the regulation does not apply to banks. Instead, the duty solely emphasises the business practices of mortgage brokers. Since brokers often represent one lender or a set of mortgage products, the Royal Commission looked into the business practices. The duty stems from the National Consumer Credit Protection Act in 2009.
Several of Australia’s economic fluctuations impact homeowners the most. If interest rates rise suddenly, homeowners must make adjustments quickly. Some homeowners have proven that they can’t handle an increase in interest rates. That’s why lenders put home buyers’ finances through several lenders’ ratios including buffering.
Lenders pay mortgage brokers for every successful home loan transaction. Thus, mortgage brokers have an incentive to push homebuyers into the products that they represent. Sometimes this doesn’t represent the best situation for the home buyer.
As a non-bank home loan lender, Mortgage House works with homebuyers and investors. Our proprietary tools and forward-thinking mindset allow us to place our clients first every time. Plus, we offer an array of mortgage products including interest-only, variable-rate, and fixed-rate. We also offer low doc, no fee, and family pledge mortgages with competitive home loan interest rates.
Best Interest Duty and Banks Conclusion
The best interest duty does not apply to banks. Nor does it apply to non-bank lenders such as Mortgage House. Nonetheless, our loan specialists have tools that help them evaluate all mortgage applications thoroughly. The efficiency allows them to find the best loan terms per applicant too. Contact our team today.