Online loan calculators will never understand the needs of borrowers
Online loan calculators will never understand the needs and the unique situation of an individual borrower and advertising such products will not benefit consumers, according Tony Harris, NSW General Manager of NCF – The Money Store.

“The recent advertising guidelines released by the Mortgage Industry Association of Australia serve to remind brokers that promoting products such as online calculators can potentially mislead consumers,” said Harris.

“These guidelines certainly hit the mark but most would-be borrowers already have the common sense not to rely on a calculator on the internet to decide which type of loan will most suit their circumstances.

“Online calculators on the internet are often designed to promote so-called mortgage minimisations schemes, which involve refinancing the loan with a line of credit - the line of credit is a ‘come and go’ facility where interest is calculated daily on the outstanding balance and charged monthly.

“A loan such as this will not benefit many borrowers and can also be relatively complicated and misleading. It is therefore essential that consumers rely on a mortgage broker to make an independent assessment about these types of loan products in relation to the consumer’s individual circumstances.

“Whilst advertising guidelines for brokers are important, the real message to borrowers should be to make sure they seek proper advice from a professional mortgage broker when making important decision about their mortgage.

“The fact is that online calculators can’t take into account a range of factors that must be considered when deciding which loan products are most suitable for each borrower.

“Once again, this also highlights the need for the mortgage brokerage industry to be regulated on a national level. National regulations would more effectively deal with these types of issues, while compliance with a different set of rules in each state will only confuse mortgage brokers and consumers alike,” said Harris.

Tony Harris is the NSW General Manager of NCF-The Money Store, which is part of Terrain Australia Limited, Australia’s first publicly listed mortgage finance company. Harris is an Associate of the Mortgage Industry Association of Australia (MIAA) & Associate of the Australian Property Institute (API).
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