PRODUCT RANKING -- Professional Packs1901 people have read this article
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| Friday, 30 October 2009 |
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Professional packages (pro packs) are a mainstream product for brokers. Aimed at a particular target demographic – typically professional singles and couples with good salaries – brokers, no matter what their geographic region, generally write pro pack loans on a regular basis. Considering the demand for pro packs it’s understandable that it’s a competitive space for lenders. In this regular bi-monthly product ranking we consider the pro pack, breaking down not only the tangible product metrics but also broker sentiment to establish the leading products in the market place. In terms of methodology, we asked each of our six member broker product review panel to recommend their top three pro packs, which when combined, resulted in nine products for consideration, including:
• ANZ – Breakfree Package • Bankwest – Lite Plus Home Loan • Homeside – HomePlus Home Loan • ING DIRECT – Mortgage Simplifier • NAB – Choice Package • RAMS – SmartWay Pro Pack • St George – Advantage • Suncorp – Money Manager • Westpac – Premier Advantage
These products then underwent an assessment by the Pisces Group taking into account loan features, such as discharge fees and interest rates; broker sentiment on a number of key indicators were also measured, including servicing, support and availability. According to Vincent Turner, Pisces Group’s business manager, the packages fell broadly into two categories: true packages – where there were a lot of additional non mortgage benefits – and discounts in and around the home loan. Considering customer appeal, Mr Turner says that the importance of these additional features and benefits to the customer’s situation would drive the ultimate choice. Of the top products ranked, the lions’ share balanced a good home loan with sound additional benefits. Mr Turner believes the products that rated poorly typically had excessive package fees that affected the total cost, or had minimal difference between their package and non package rates / fees. The disparity between fees was represented in a number of areas. Average committed fees ranged from St George’s $13,710 down to ING DIRECT’s $2,131, according to the Pisces Group. Overall the average fee was $10,221 taking into account all nine products assessed. Discharge fees also fluctuated considerably with RAMS topping the list at $3,500; Bankwest’s $300 was lowest. Overall, the average early discharge fee was $1,189. Interest rates also varied considerably in line with product policy. RAMS’ 4.89 per cent was markedly lower that Bankwest’s 5.48 per cent, which was the highest rate. The average interest rate across all nine products was 5.12%. There were also stark differences on a number of other accounts, in particular discount rates as well as total fees. Overall, these impacted on a products’ ranking – nevertheless products that ranked low in some areas ranked high in others, keeping the final ranking close. While the results were tight, there was a clear standout winner: Westpac, which performed well in both sentiment and product metrics. Although Westpac has strong natural market share – and as a result scale with brokers – standalone the product stacked up. There was little space between the next three however – highlighting the similarities and competitiveness of pro pack products.
MORTGAGE PRODUCT RANKINGS
Overall ranking Westpac – Premier Advantage 1 ANZ – Breakfree Package 2 ING – Mortgage Simplifier 2 Suncorp – Money Manager 4 Homeside – HomePlus Home Loan 5 NAB – Choice Package 5 RAMS – SmartWay Pro Pack 5 BankWest – Lite Plus Home Loan 8 StGeorge – Advantage 9
Interest rates Ranked by rate (lowest to highest)I RAMS – SmartWay Pro Pack 1 ING – Mortgage Simplifier 2 NAB – Choice Package 3 Homeside – HomePlus Home Loan 4 Suncorp – Money Manager 5
Committed fees Ranked by total committed fees (in dollar terms, lowest to highest) on a $250,00 mortgage over 30 years ING – Mortgage Simplifier 1 Homeside – HomePlus Home Loan 2 Suncorp – Money Manager 3 RAMS – SmartWay Pro Pack 4 ANZ – Breakfree Package 5
Discharge fees Ranked by fee size, (in dollar terms, lowest to highest), including any discharge penalties BankWest – Lite Plus Home Loan 1 ANZ – Breakfree Package 2 Heritage – Professional 3 Suncorp – Money Manager 4 Westpac – Premier Advantage 5
Total fees ranking Ranked by total committed fees and all total fees (in dollar terms, lowest to highest) ING – Mortgage Simplifier 1 Homeside – HomePlus Home Loan 2 Suncorp – Money Manager 3 BankWest – Lite Plus Home Loan 4 ANZ – Breakfree Package 5
Scenario 1 Ranked (in dollar terms, based on best package to worst package) on $150,000 borrowed over 30 years ING – Mortgage Simplifier 1 RAMS – SmartWay Pro Pack 2 Homeside – HomePlus Home Loan 3 NAB – Choice Package 4 Suncorp – Money Manager 5
Scenario 2 Ranked (in dollar terms, based on best package to worst package) on $250,000 borrowed over 30 years RAMS – SmartWay Pro Pack 1 ING – Mortgage Simplifier 2 Homeside – HomePlus Home Loan 3 NAB – Choice Package 4 Suncorp – Money Manager 5
Servicing times Turnaround times Westpac – Premier Advantage 1 ANZ – Breakfree Package 2 BankWest – Lite Plus Home Loan 3 ING – Mortgage Simplifier 4 RAMS – SmartWay Pro Pack 4
Product availability / accessibility Minimum volume requirements, availability to all brokers etc ING – Mortgage Simplifier 1 ANZ – Breakfree Package 2 Westpac – Premier Advantage 2 St George – Advantage 4 Homeside – HomePlus Home Loan 5
Broker support and service Access, communication during loan assessment, progress reports etc Westpac – Premier Advantage 1 ANZ – Breakfree Package 2 RAMS – SmartWay Pro Pack 3 BankWest – Lite Plus Home Loan 4 Homeside – HomePlus Home Loan 4 St George – Advantage 4
Overall policy ANZ – Breakfree Package 1 Westpac – Premier Advantage 2 BankWest – Lite Plus Home Loan 3 Homeside – HomePlus Home Loan 3 RAMS – SmartWay Pro Pack 3
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