Heritage Bank tops list of cheapest mortgage providers over past 12 years
Borrowers who took out a home loan with Heritage Bank in 2000 have, on average, saved the most in home loan payments compared to 23 other lenders, a new survey has found.
Those who took out a Citibank home loan have, on average, paid the most.
A study of 23 Australian financial institutions in the period from 2000 to 2012 found that Heritage Bank had the lowest average standard variable home loan rate of 7.01% over this period while the most expensive was Citibank with an average standard variable home loan rate of 7.43%.
The difference in the two rates equates to nearly $1,000 a year in extra mortgage repayments.
While interest rates are by no means the only consideration when applying for a mortgage (other factors include fees, costs, features and purpose of the loan), they are often the starting point for borrowers to investigate which lender to submit an application through.
Source: Heritage Bank from University of New England study
The study was carried out by professor Abbas Valadkhani from the University of New England, who found that on average building societies offered the cheapest home loan rates (7.15%) followed by Australian banks (7.25%) and then foreign-owned banks (7.35%).
The next best behind Heritage Bank were the Newcastle Permanent Building Society, Hume Building Society, Greater Building Society and Adelaide Bank.
The average across the 23 lenders was 7.24%.
The cheapest of the major banks over the 12 year period was NAB ranked 11th (7.25%) and Westpac the most expensive, ranking 21st (7.34%)
Australia’s biggest mortgage lender the Commonwealth ranked 14th and ANZ, 17th.
Heritage Bank CEO John Minz said he was delighted but not surprised that the study had identified Heritage as offering the lowest overall rate.
"Heritage is all about providing our customers with the best value we can," he said.
"As a customer-owned bank, we put people ahead of profits, and the results of this study clearly demonstrate that we are delivering on our promise of maximising value for our customers.
"We are extremely proud that we have come out on top of this comparison, particularly as it spans a 12-year period. That is ample evidence of our long-term commitment to the financial well-being of customers."