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Trend Report June 2007
11 July 2007
The Big 4 Regain Lost Ground With Professional Packages
The popularity of Professional Package mortgages is on the rise as the ‘Big 4’ lenders tussle to regain market share, according to the latest Quarterly Report for June 2007 from national mortgage broking group, Smartline.
Smartline’s Quarterly Reports measure trends in the Australian mortgage market using information captured by the group’s 145 franchise operators across Australia.
The latest data revealed more than 52 per cent of all home loans written in the June 2007 quarter were part of a Professional Package, compared with just 38 per cent in the June 2006 quarter.
“With recent increases in petrol prices and interest rates, borrowers are more price sensitive than ever and are continuing to take advantage of intense price competition between lenders,” said Mr Chris Acret, Managing Director of Smartline.
“Professional packages can provide more benefits along with cheaper interest rates than other mortgage products – and in many cases represent better value for money than traditional ‘no frills’ loans that offer lower headline rates.”
“In fact, introductory loans, which typically offer a very cheap rate for the first year, now represent less than 1 per cent of all new loans written.”
“Many people do not know about Professional Packages, and may be missing out of some big benefits. Typically people employed in professional industries, or earning $50,000 or more per year, will qualify for these packages with many of the lenders on our panel.”
The Smartline June, 2007 Quarter Report also pointed to an increase in market share for the ‘Big 4’ lenders – with the Commonwealth Bank of Australia (CBA), Westpac, ANZ and National Australia Bank (NAB) accounting for 64 per cent of all loans written in the June 2007 quarter, compared with 60 per cent in the June 2006 quarter.
In terms of overall market share, CBA continues to lead the market followed by ANZ and Westpac, while two of the fastest growing lenders Bankwest and ING lost market share for the first time in over two years.
“It has been fascinating to watch the battle of the lenders in 2007. The ‘Big 4’ are responding more aggressively than ever to try to recapture the share they have lost to the newer entrants and they are finally starting to regain some ground,” said Mr Acret.
“The great news is that the biggest winner from all of this competition is the borrower.”
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