Trouble is brewing in the Aussie mortgage market

Home loan borrowers are turning on their lenders and sending big bank customer satisfaction ratings down.


Roy Morgan Research reports that the average satisfaction levels of the Big Four banks' personal customers has been trending down since May 2016. the main cause, according to Roy Morgan is a big reduction in satisfaction among home loan customers. However, some banks have become more popular in 2016 as borrowers look around and find alternative lenders that suit them.


Mortgage stress is growing


Ratings agency Standard & Poor’s reports that the number of mortgages (in portfolios it monitors) that are falling behind in repayments has jumped up 25 per cent in the last 12 months.


Standard & Poor’s said that usually mortgage arrears decline in Spring, but not in 2016. In total more than 1 in 100 standard full-doc Australian mortgages looked at by S&P are now behind with repayments.


This is particularly disturbing because interest rates are at historically low levels. Low rates give borrowers the opportunity to get ahead on repayments but instead, increasing numbers are falling behind.


Which banks are getting more popular with customers?


One common way of measuring if a customer is happy is to ask them whether they would recommend their bank to their friends or family. Roy Morgan asked Aussie bank customers whether they would recommend their bank and found that:


* About half of all mutual bank and credit union customers will recommend their bank.

* About 47 per cent of Bendigo & Adelaide Bank customers will recommend their bank.

* 44 per cent of ING DIRECT customers will recommend their bank

* Suncorp and Bank of Queensland both scored about 34 per cent on this measure.

*Commonwealth Bank is still the most popular big four bank, with 30.5 per cent of customers happy to recommend it, but this score is down from almost 32 per cent six months ago.

* St George Bank and Bankwest both scored about 26 per cent.

* ANZ Bank is the only big four bank to improve its score in the last six months, up about 2 per cent to 25.4 per cent.

* National Australia Bank and Westpac’s scores are falling, both down almost 3 per cent to 24 per cent and 22 per cent respectively.


You can research and compare home loans from all of Australia’s major lenders here.

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