by Paul McBeth
There’s a lot more room in our market for no-frills mortgage products.
At least, that’s the view of ASB Bank’s chief manager marketing Matthew Bartlett. He says some 15 to 20 per cent of the Aussie home lending market is made up of no-frills mortgages. And he says the experience of ASB’s parent, Commonwealth Bank - which has just announced plans to merge with Colonial – has shown it’s an area with great potential.
ASB Bank launched its Economiser Home Loan four weeks ago and Bartlett says it’s had a lot of positive response to date from new and existing customers. The Economiser offers a variable rate below the bank’s regular floating rate but comes with a monthly account charge, less flexibility and some extra conditions (see our previous story). That’s not going to suit everyone, but he claims it is successfully filling a gap in the market.
"We’re very much fitting in to the no-frills mode. Yes, some elements are compulsory, such as the application fee and compulsory insurance. But some of our competitors are making compulsory fees and linking it with airpoints."
One such lender is ANZ, which has been running a home loan/Qantas Telstra ANZ Visa (QTAV) card promotion. The bank has recently extended the offer from the end of March to April 21 – borrowers who meet certain criteria and who have/apply for a QTAV card receive 10,000 reward points.