The price war between Australia’s major banks hasn’t resulted in a rush by home loan customers to switch lenders, a survey has found.
Loan Market Chief Operating Officer Dean Rushton said a national survey of the company’s mortgage brokers found the majority had not reported any significant change in refinancing settlements.
The survey which asked ‘Are you seeing more refinancing deals since banks started their price war?’ found 44 per cent had not noticed any additional switching or refinancing activity.
Eight per cent of respondents said there were even fewer refinancing deals. Thirty seven per cent of the 136 brokers who responded to the survey said there was a slight increase. Just 11 per cent said there was a big increase.
Mr Rushton said that one of the major reasons behind the less than anticipated refinancing activity was the work being done by banking retention teams.
“Existing customers who enquire about upgrading or changing their mortgages are being given a lot of attention by these retention teams,” Mr Rushton said.
“The banks and their retention teams are working hard to improve their customer service offering and are willing to review their pricing in some circumstances.
“This often results in clients who threaten to jump ship continuing with their lender.”
Mr Rushton said the home loan market was currently highly competitive and there were a range of new customer deals on offer.
“But people need to be aware of the full picture in terms of the costs of exiting their old loan and entering the new loan,” he said.
”If you eat up any interest rate savings in these costs then there is no financial benefit to switch.”
Mr Rushton said a mortgage broker was best placed to offer advice on a borrower’s situation and the best options for switching loans.
“A mortgage broker can assess a borrower’s personal circumstances and provide the best advice on what is on offer out there,” he said.