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Home loan complaints rise

Complaints against banks by home loan borrowers rose by 12.3% last year amid a rising number of declined applications, according to the Banking Ombudsman Scheme. 

Wednesday, September 18th 2019, 7:58AM

The Banking Ombudsman Scheme provided TMM Online with a breakdown of complaints and disputes relating to home loans in the 2018/2019 year, after publishing its latest annual report.

The data shows there were 446 property lending complaints, compared to 397 last year. There were also more disputes involving the Ombudsman this year, a total of 44 cases, compared to 29 in 2017/2018. 

Of the 44 disputes involving the Ombudsman, 13 are still under investigation. 

Banking Ombudsman Nicola Sladden said bank decisions were a common theme for the year, as more customers were turned away by their lender or not given access to certain products.

Sladden said: "177 cases relate to decisions made by the bank. The main theme is a declined application for a loan or an offer for service withdrawn based on the customer’s financial situation."

She added: "Overall, the number of cases we are seeing in the home loan space is increasing. Property lending was our second highest product type in the 18/19 financial year, after transactional accounts (752 complaints and disputes)."

There were also a handful of complaints relating to reverse-equity products this year. There were three complaints in total, up from zero in the prior year.

The increased number of complaints is likely to be watched closely by mortgage advisers as financial regulators put more emphasis on customer outcomes and treating customers fairly. 

The Ombudsman has issued advice to customers. It says borrowers should potentially assess early repayment charges on loans, and consider whether lenders may want a slice of sale proceeds to cover other loans. 

Overall, the major banks, led by ANZ, received the most complaints about their services last year, according to the Ombudsman, followed by ASB, BNZ, and Westpac. Kiwibank also took up 12% of cases, despite only having 4% of total assets in New Zealand.

Tags: ANZ ASB banking ombudsman banks BNZ complaints house prices housing market mortgages Westpac

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 ▼3.89 ▲4.05 4.39
ASB Bank Special - ▼3.39 ▲3.55 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.14 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.39 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.02 4.09 4.39

Last updated: 22 November 2019 4:35pm

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