Westpac Loses Business To Rivals- Mortgage Broker Says

January 4th, 2010 | by admin |

A leading mortgage broker Australian Finance Group, who says it helped secure finance for as much as 10 per cent of the Australian mortgage market, says that Westpac’s decision to raise its interest rate by 45 basis points or 20 basis points in excess of the official rise in interest rates, resulted in rivals picking up market share at its expense.

In an interview with The Age, AFG said a ”large proportion” of its December business was as a consequence of the rate rise and came from disgruntled former Westpac borrowers.

According to AFG the level of refinancing hit a yearly high in December, largely driven by anti-Westpac sentiment and resulting in CBA becoming taking the largest share of mortgage lending that month, overtaking rival Westpac.

“‘There are people who are fed up with Westpac and are making a stance,” AFG sales manager Mark Hewitt said, according to the newspaper.

Westpac was the first Big Four lender to raise its interest rates in November, in response to the 25 basis point increase enacted by the Reserve Bank of Australia. Westpac lifted its variable rate mortgages by 45 basis points.

Westpac’s decision to raise interest rates in excess of official lending rates drew intense criticism from consumer groups, politicians and the media.

To add fuel to the fire it later emerged that the lender had produced an instructional video for training purposes which compared its rate increase to increases in the cost of banana smoothies.

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