Westpac's weak performance in the home loan market over the past couple of years is the result of a poorly executed strategy aimed at attracting new business in a low-growth market, while preserving the margin on its established loan portfolio.Research by Credit Suisse banking analyst, Jarrod Martin, has looked at the different approaches taken by the big banks to managing the trade-off between margin and market share in tough market conditions.Martin's note, which was published yesterday, said Westpac's approach has been to preserve its "back-book" margin through a relatively high headline variable rate, combined with sharply priced fixed-rate mortgages, deep package discounts and cheap offers from other group brands, such as St George.According to Australian Prudential Regulation figures, Westpac's mortgage book grew by two per cent over the 12 months to April. NAB's mortgage book grew 7.3 per cent over the same period, ANZ's book grew by 5.2 per cent and Commonwealth Bank's grew by 1.4 per cent. System growth was 4.5 per cent.Martin said ANZ has approached the trade-off between margin and market share in a completely different way. ANZ has an attractive headline rate but the most expensive effective rate of the Big Four."ANZ has effectively defended margin but without incurring market share attrition. It has done this with attractive carded rates but modest package rates," he said.The research underlines the importance of the headline rate in attracting customers, even though few end up paying that rate.NAB has eased its price competitiveness over the past year. However, its Homeside and UBank brands have offered low rates and maintained the bank's market share momentum.Martin said: "NAB is deploying multi-branding and differential brand pricing better than Westpac to balance the trade-off between margin and market share."Commonwealth Bank has been aggressive with both headline and discount rates, as it tries to stop a sustained loss of share over three years.Based on effective mortgage rates, rather than headline rates (compiled by the broker 1300 HomeLoan), Credit Suisse said Commonwealth Bank and NAB's Homeside offered the cheapest home loans among the Big Four.Commonwealth Bank's effective rate is 5.3 per cent, followed by NAB's at 5.33 per cent, Westpac's at 5.36 per cent and ANZ's at5.43 per cent.Westpac has a 90 basis point package discount, CBA offers 85 basis points, NAB offers 80 points and ANZ offers 70 bps.Three of the Big Four - Commonwealth, NAB and Westpac - have increased their discounts this year. ANZ cut its discount from 73 to 70 basis points.