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thesundaymail.com.au
REAL ESTATE AUCTION RESULTS
Lenders to love or avoid ranked
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[email protected]. Information and images courtesy listing agents, RP Data and realestate.com.au.
It can make $1000 difference John Rolfe
FOR the first time the long-run difference between the best and worst home loans can be revealed – and it’s nearly $1000 a year. Customers of some foreign banks are paying the highest interest rates while the likes of Rebecca and Tim Forde are paying the least. A study of Australian mortgage rates published in a leading international financial journal reveals that over 12 years, Citibank charged its standard variable home-loan customers an average 0.42 percentage points more than the leading offer on the market. On a $300,000 mortgage, this adds $973 of interest annually. ‘‘Don’t go to Citibank,’’ the twoyear study’s author, University of New England macro-economics professor Abbas Valadkhani, told The Sunday Mail. Citi has $7.7 billion worth of home loans in Australia, making it the 10thlargest bank in the mortgage market. A Citi spokesperson said it now had one of the most competitive rates in the market. The second-worst was also the subsidiary of a foreign institution – Arab Bank Australia. It has $217 million worth of home loans, making it one of the smallest banks in the market. An Arab Bank spokesperson said its rates were ‘‘currently competitive’’. The top performer among 23 institutions was Queensland’s Heritage Bank, ahead of NSW-focused
Newcastle Permanent and then Hume Building Society, which dominates lending on the Victoria-NSW border. The leading SA lender was Adelaide Bank at fifth on the list. Toowoomba homeowners Rebecca and Tim Forde recently moved to Heritage Bank from ANZ. ‘‘It’s a better rate, better service and better package,’’ Mrs Forde said. Heritage, which has its origins in Toowoomba, has about $6.5 billion worth of home loans. The top major was NAB, ahead of the Commonwealth Bank, ANZ and then Westpac. A comparison by The Sunday Mail shows that the gap between the leaders and laggards in the study was up to 1.2 per cent, or nearly five standard-size RBA cuts. The study also analysed how quickly – and to what extent – lenders adjust variable home-loan rates after changes to the RBA cash rate. It finds eight put rates up like ‘‘rockets’’ and down like ‘‘feathers’’ – Citibank, Arab Bank, CBA, HSBC, Suncorp, BankSA, Tasmania’s B & E Personal Banking and Victoria’s Bankmecu. Professor Valadkhani said his study could assist borrowers in identifying which lenders offered more competitive mortgage rates, plus helped regulatory agencies such as the Australian Competition and Consumer Commission and Australian Prudential Regulation Authority to enhance transparency in consumer lending.
WHERE: 729 Esplanade, Lota HOW MUCH: $715,000, sold post-auction
WHAT: Bay views, tropical pool and spa, Bali hut AGENT: Marc Sorrentino, McGrath, Bulimba
WHERE: 7 Goolara St, Cannon Hill HOW MUCH: $535,000, under hammer WHAT: Renovated, open-plan living, polished floors AGENT: Julie Lerner, McGrath, Bulimba
WHERE: 26 Magee St, Graceville HOW MUCH: $760,000 WHAT: Renovated, 3-bed, 700sq m block AGENT: Charles Wiggett, Belle Property, Graceville
WHERE: 40 Murray St, Taringa HOW MUCH: $1.202 million WHAT: Modern home, 4-bed, 2-bath, 817sq m block AGENT: Daniel Lee, LJ Hooker, Toowong
LONG AND SHORT OF THE BEST AND WORST T MORTGAGE RATES TOP 5 Lender
Heritage Bank
Home loan Current rate avg rate 2000-12 (%) (%)
BOTTOM 5 Lender
Home loan Current rate avg rate 2000-12 (%) (%)
7.01
5.89
Citibank
7.43
6.44
Newcastle Permanent 7.04
5.80
Arab Bank Australia
7.41
6.75
Hume Building Society 7.06
5.75
Westpac
7.34
6.26
Greater Building Society 7.08
5.75
Bendigo Bank
7.32
6.26
Adelaide Bank
5.56
AMP
7.32
6.25
7.12
WHERE: 31 Jackson St, Indooroopilly HOW MUCH: $713,000, under hammer WHAT: 3-bed 1-bath, 2-car; 759sq m block AGENT: Tyler Bean, LJ Hooker, Toowong
WHERE: 9/40 Marine Pde, Miami HOW MUCH: $475,000, under hammer WHAT: Open-plan living, 2-bed, 2-bath, 1-car AGENT: Perry Brosnan, John Henderson Real Estate
Sources 2000-12 rates: Journal of International Financial Markets, Institutions & Money, Current: Lender websites
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JUNE 9 2013 Page 63
