Discovery Finance Australia has released a parody of the Ashley Madison infidelity dating site called Bankley Madison, poking fun at Australian banks and mortgage lenders who openly provide better rates and deals to new customers – effectively cheating on their existing customers.
Just in time for Valentine's Day, the parody of the infamous website comes with the tagline, “It’s a mortgage, not a marriage. Have some fun”.
The Adviser’s sister publication Mortgage Business recently reported that many lenders are now offering significant rate discounts to new customers, leaving their loyal mortgage customers with little reward.
Jayden Vecchio, director of Discovery Finance Group, decided to take action and try to throw some light on the situation after seeing existing customers being left in the dark.
“I've been in the mortgage industry for several years and I've noticed, with the recent rate increases and regulatory changes, there are larger than ever rate disparities between new and existing borrowers,” Mr Vecchio said.
“I’ve personally seen people paying up to one per cent more. This means on a $300,000 loan that a new home owner could be saving over $3,000 per year more than an existing one. That could make a significant difference to the average Australian,” he said.
“I hope the Bankley Madison page sheds light on the situation for existing home owners and gets them to ask their bank or mortgage broker the question – ‘Do I have the best rate and deal available?’ And if not, they need to take some action."
Mr Vecchio said he came up with the idea when he was helping his parents, who had been with the same bank for more than 20 years, with their loan.
He tried to speak to their banker to review their mortgage product and fees which had increased three times over the past 12 months alone.
They were on older and outdated lending products, but the bank would not allow them to change the loan product without paying significant fees.
"Oddly we found in my parents' situation it was cheaper to refinance to a new bank who provided significantly lower rates [and] fees, and we're also [offered] a $1,250 cash incentive,” Mr Vecchio said.
“This goes to show that unfortunately in banking – loyalty doesn't pay,” he said.