Product Type: Market Research Report
Published by: Datamonitor
Published: February 2008
Product Code: R313-31088Description Introduction
Mortgage packages, which combine a mortgage with a credit card and transaction account at the same institution, have become very common in Australia. This report analyzes the ever changing market for mortgage packages in Australia, identifying factors determining growth, and forecasting future developments.
Scope
Draws upon a survey of 2,000 Australians to provide insight into consumer attitudes on mortgage bundles. Analyzes the emergence and growth of mortgage packages, identifying the key drivers of this market. Incorporates interviews with leading mortgage executives in Australia. Covers the major lenders' product offerings.
Highlights
Mortgage packages have gone from being niche products only offered to the top end of the market, to being mainstream products available to most mortgagors. The current proportion of new lending commitments that are attributable to packages are around 50%. From the financial institution’s point of view, mortgage packages offer a number of advantages. Mortgage packages can be used to attract new customers, to increase loyalty of current customers, and to increase share of wallet. Different components of the mortgage package play different parts for these strategies. Some observers believe that packages will develop into customizable products suitable for a wide range of niches. For example, a provider might offer a first home buyer’s package or a package suitable for elderly customers. However, for this to occur, banks need to collate substantial data about suitable pricing of different package structures.
Reasons to Purchase
Keeps you up-to-date with the dynamic mortgage package market by providing you with in-depth analysis of the major issues. Plan your strategy with confidence using Datamonitor's forecasts of future developments in mortgage packages. Provides in-depth analysis of lenders' products allowing you to reassess your product strategy.
Table of Contents - DATAMONITOR VIEW
- CATALYST
- SUMMARY
- ANALYSIS
- Bundled retail banking products have become more common
- Professional packages were first offered in the late 1990s
- An estimated 50% of all new mortgages are now part of a package deal
- Mortgage packages offer discounts in return for signing up for other products
- Mortgage packages most often consist of mortgages, accounts and credit cards
- Mortgage packages offer three main benefits to consumers
- Package deals are appealing to customers who focus on the mortgage rate
- The bigger the mortgage, the more of a saving a package can entail
- Customer acquisition, retention and cross-selling can all be improved with packaged products
- Mortgage packages can be used to attract new customers
- Customers with a package deal are less likely to switch provider
- Banks use packages to cross-sell products
- Banks use mortgage packages to compete with non-bank lenders
- Banks are well-positioned to benefit from offering mortgage bundles
- Most Australians would first go to their bank when acquiring new financial products
- As packages became more common, bank package deals have become standardized
- There is a wide range of competing mortgage package options in the market
- All the major Australian banks offer mortgage packages
- ANZ
- CBA
- NAB
- SGB
- WBC
- Smaller banks and building societies also offer mortgage packages
- AMP Banking
- Bank of Queensland
- BankWest
- Heritage Building Society
- Suncorp
- Mortgage package offerings will keep evolving
- Eligibility requirements for professional packages may become even more relaxed
- More products and features will be available in a package
- Banks may re-evaluate package pricing in light of recent changes in the mortgage market
- Mortgage packages will continue to be prevalent
- The global credit crisis will continue to drive borrowers back to the banks
- As more institutions offer diversified retail banking services, packages will increase
- When replacing mortgage packages, consumers often choose another mortgage package
- APPENDIX
- Supplementary data
- Definitions
- Cash rate target
- Lending commitments
- Non-bank lender
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Different bundle strategies use different product components
- Table 2: The major banks' package offerings, 2008
- Table 3: Interest rate discount schedule for the ANZ Breakfree package, 2008
- Table 4: Interest rate discount schedule for the CBA Wealth package, 2008
- Table 5: Interest rate discount schedule for the SGB Advantage package, 2008
- Table 6: Interest rate discount schedule for the WBC Premier Advantage package, 2008
- Table 7: Package offerings of smaller banks, 2008
- Table 8: Interest rate discount schedule for the AMP Professional package, 2008
- Table 9: Interest rate discount schedule for the Bank of Queensland Home Loan Privileges package, 2008
- Table 10: Interest rate discount schedule for the BankWest Lite Plus package, 2008
- Table 11: Interest rate discount schedule for the Suncorp My Home package, 2008
- Table 12: Most Australian consumers expect a preferential rate in order to bundle products, 2007
- Table 13: 19% of Australian mortgagors chose their home loan provider partly based on bundling, 2007
- Table 14: 57% of Australians would first go to their bank when taking out a new product, 2007
- Table 15: A majority of Australians prefer established domestic providers of banking products, 2007
- Table 16: Bundling options affect provider choice, 2007
- List of Figures
- Figure 1: Most Australian consumers expect a preferential rate in order to bundle products, 2007
- Figure 2: 19% of Australian mortgagors chose their home loan provider partly based on bundling, 2007
- Figure 3: 57% of Australians would first go to their bank when taking out a new product, 2007
- Figure 4: A majority of Australians prefer established domestic providers of banking products, 2007
- Figure 5: Bundling options affect provider choice, 2007
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