Mortgage packages now account for half of all new mortgages in Australia, market analyst Datamonitor announced today.
The packages, which combine a mortgage with a transaction account and credit card from the same financial institution, have exploded in popularity since first launched in the 1990s.
In just 2007 $130 billion worth of lending commitments were granted as part of a package deal.
Unfortunately, with major banks the predominant providers of mortgage packages their growing popularity is unlikely to be welcome news for the non-bank sector.
Furthermore, packages can drive strong customer retention rates, with research showing transaction accounts result in customers less likely to switch providers, according to Datamonitor.
“The global credit crisis has driven many mortgagors back to the major banks, which are perceived safe institutions,” said Datamonitor financial services analyst Petter Ingermarsson.
“As major banks are the predominant providers of mortgage packages, this will lead to an even greater proportion of package deals in the market.”
Non-bank lenders will have to continue to develop innovatvie prodcuts to claw these customers back from the banks.
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