Savvy customers get streets ahead on home loans
Savvy Heritage Bank customers are fast-tracking their home loan repayments, bringing closer the great Aussie dream of owning their own home.
Latest figures reveal 85 per cent of Heritage home loan customers are ahead in their repayments, a significantly higher rate than the national average.
By comparison, the Reserve Bank of Australia (RBA) says various data sources indicate just 50 per cent of Australian borrowers overall are ahead of schedule on their mortgage.
Heritage CEO Mr John Minz said there were a number of reasons for the high prepayment rate for Heritage customers.
“Many customers keep their repayments at the same level even when the interest rate and minimum repayment levels drop, giving them a buffer in their loan,” Mr Minz said.
“Sometimes borrowers keep funds from other sources such as salary bonuses in their home loan or in offset or redraw accounts to also increase their buffer.
“It could also be that because they are savvy enough to bank with Heritage in the first place, and take advantage of the great value we offer, they are also savvy enough to get ahead with their repayments.”
Mr Minz said 41 per cent of Heritage customers were ahead in their repayments by more than six months.
“Another significant indicator of our healthy home loan repayment trend is the low rate of arrears or payments overdue by more than 30 days,” Mr Minz said.
“On average, industry arrears were 1.11 per cent at the end of December, while average arrears for Heritage were 0.44 per cent, which is also considerably lower than the building society or credit union segment at 1.06 per cent.
“That says a lot about the type of customers we have and the work we do to ensure that our customers do not find themselves in difficulty with their repayments.”