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ISCOVER
Steven Cross
The removal of exit fees has failed to do the one thing it set out to achieve: increase competition between lenders.
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According to a survey of more than 5,000 bank customers by Canstar Blue, just 5 per cent of people have switched lending institutions over the last 12 months.
Canstar Blue’s manager Rebecca Logan said no matter how much choice is out there and despite encouragement from the Federal Government, Australians struggle to leave the banking relationship they are currently embedded in.
“Many consumers also have multiple products with the one institution which is another common impediment to making a change as people often feel invested emotionally with their provider," she said.
The statistic comes as somewhat of a surprise given that refinancing continues to dominate market activity.
According to the latest data from AFG, 36.6 per cent of all home loans written last month were refinances.
Of those that did switch to another lender, 23 per cent did so because of fees, 15 per cent because of a better offer elsewhere and 14 per cent due to interest rates.
