Mortgage customers want better deals

Mortgage customers have made it a priority to pay down their debt and they want their lenders to assist with better deals. According to research published by Ernst & Young yesterday, only a third of mortgage holders feel they are getting the best deal from their bank.

The Reserve Bank reported last month that around half of borrowers were ahead of schedule on their mortgage payments. The RBA said the share of Australian households paying their mortgages ahead of schedule was high compared with other countries.

The pre-payment buffer, which includes balances in mortgage offset and redraw facilities, is worth about 10 per cent of the outstanding stock of housing loans.

Ernst & Young found that 65 per cent of mortgage customers want to be rewarded for their loyalty with lower fees and better rates. They want their lender to make a contribution to their cost-cutting program and they don't think they are getting the best deal.

The survey found that borrowers' priority was, more than previously, getting the best price. The relationship with the lender had diminished in importance.

Ernst & Young customer leader, advisory, John Rolland, said in a statement: "While switching is not common at present, the stakes are now higher and the potential pay-offs for customers are greater. So we will see more Australians putting in the effort to switch."