Australian Banking Association (ABA) released a new report which sheds light on consumer behavior within financial services in Australia. The research was commissioned by the ABA and executed by Deloitte Access Economics.
“The report showed that 2.8m customers switched to new banks or financial providers for their home loans, credit cards and transaction accounts over the last year.” (brokernews.com.au)
“According to Anna Bligh, ABA CEO, the report confirmed that competition among the banks is strong. Whether you’re looking for a new home loan, a credit card or a transaction account, competition for a customer’s business is fiercer than it has ever been, Bligh said. However, broken down, the 2.8m figure translates to just 15% of everyday transaction account holders, 10% of credit card holders and 5% of mortgage holders switching banks in the 12-month period.” (brokernews.com.au)
“The majority of customers are satisfied with their bank product, with 79% of everyday transaction, 75% of credit card and 67% of mortgage owners saying they are ‘very satisfied’ of ‘satisfied’ with their providers. According to the report, 23% of those surveyed indicated they were ‘actively searching’ for a mortgage.” (brokernews.com.au)
“When it came to their considerations in choosing a home loan, around 90% ranked factors relating to price – interest rates, fees and the ability to get a discount on the advertised rate – as either ‘very important’ or ‘important’. 90% said the ability to make additional repayments was ‘very important’ or ‘important’ when it came to their choice of mortgage, with 84% also communicating that finding a bank that will give them the loan amount they need fell into the same two rankings. However, 74% ranked their loyalty or relationship with their bank as ‘very important’ or ‘important’, with just 26% indicating it would not impact their choice in mortgage product or provider selection.” (brokernews.com.au)
Regarding to the research Aussies seems to seek the best possible deal and if they don’t get it from their existing credit provider, then they go elsewhere.
What does this change of consumer behavior mean to the industry?
“Consumers are continuing to express a desire to seek out competitive offers. First home buyers, upgraders and mortgage holders refinancing have driven the market share of the non-major banks.” (brokernews.com.au)
“The AFG Index corroborated the most recent ABS data showing first home buyers have been particularly active over the last few months, accounting for 15% of mortgages over the period – the highest level in seven years. The low interest rate environment has also contributed to record numbers of borrowers looking to pay down debt through a P&I loan. During the September quarter, 82% of loans were P&I – the highest proportion in the history of the AFG index.” (brokernews.com.au)
“The primary technology provider to the mortgage lending industry has called on lenders to better support brokers through valuing their time. Many lenders leave brokers to manually handle loan variations, including term extensions, principal decreases on a loan, product splits amount to around a third of brokers’ transactions. Lenders who provide brokers with a standardised approach to manage customers’ variations throughout the life cycle of their loan, don’t just empower brokers and eliminate any fear or perception of channel conflict, they ensure retention of ownership of the loan.” (brokernews.com.au)
“Data from the Australian Bureau of Statistics (ABS) has revealed that new lending commitments to households rose 3.2% in August following a 4.3% jump in July and a 1.8% increase in June. Strong refinancing activity was seen for the second month in a row, while new lending commitments for investment dwellings recorded the strongest monthly growth since September 2016, said ABS chief economist, Bruce Hockman.” (brokernews.com.au)
“Commitments for investment dwellings rose 5.7% with Queensland – up 10.4% – and Victoria – up 9.5% – recording the strongest growth.” (brokernews.com.au)
“The number of loans to owner occupier first home buyers rose 5.2% in August, the strongest rise this year. Year on year, these commitments were up to 8.0%. Fist home buyers now account for 30.1% of the total market, the highest share since the start of 2012, so continued growth in this segment is important for the broader housing market” (brokernews.com.au)
If you consider checking that you are still having the best deal – Let us help you!
With interest rates at their lowest levels in decades, it pays to check whether your current home loan is still right for you. It’s a time consuming task that many people put off, even though they may have the potential to save significant amounts of money.
At Option, our primary concern is: how much money we can save you. That means we work extremely hard to make sure we find your best loan option, check on your current home loan and let you know whether you could save by switching. If you do decide to switch, we’ll do all the legwork for you to make it as easy as possible.
The cost of this consultation is 100% covered by us. Why? Because your future is important to us.
Every client we serve, we want to go above and beyond for. We want to make sure your financial future is secure – and if we do that well, you’ll be able to get your next property sooner.
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At Option Home Loans, we will meet you at a time and place that suits you. As soon as you contact us or book an appointment, one of our lending specialists will be into touch.
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