Banks accused of delaying home loan switching
The big banks have been accused of taking too long to release customers wanting to switch home loans from their existing mortgage, with fresh data revealing average loan discharge times are twice as long as what the competition regulator considers appropriate.
Data from mortgage broker Lendi shows the big four banks are taking an average of 20 days to discharge an existing mortgage when a borrower wishes to move banks – double the 10 days that the Australian Competition and Consumer Commission recommends as the appropriate time to safeguard competition.
Delays in home loan switching are still rife, and regulators want the big banks to speed up the process.
The 20 days of waiting for a discharge is a 25 per cent improvement on the peak of 25 days last July. But mortgage brokers remain frustrated that banks continue to drag out the process, suggesting this is anticompetitive as billions of dollars of home loans come off fixed rates, providing customers the chance to switch banks for a better deal.
“There have been minor improvements to discharge times, which we welcome. However, with the customer in mind, is it good enough? Probably not,” said Lendi Group co-founder and chief executive David Hyman.
“At a time when thousands of households are rolling off fixed mortgages, lengthy loan discharge times only add to that pressure for homeowners. Banks should be allowing those borrowers who want to switch to do so as efficiently as possible.
“Nineteen to 21 days is a long wait for a customer who needs to ease their household financial pressure, and we aren’t seeing banks doing enough to speed this up.”
The Mortgage & Finance Association of Australia wants the government to act on the delays by implementing recommendations the
Read more on afr.com
