Lachlan Harris defends One Big Switch from critics

Lachlan Harris has hit back at critics of his One Big Switch mortgage discount campaign, telling them to “watch this space”. 

The One Big Switch campaign, which was launched on July 31 and is backed by consumer group Choice, has attracted in excess of 10,000 subscribers, 10 times the initial target of 1,000. 

Harris, a former Rudd government advisor, told Property Observer numbers are rising rapidly but would not comment on exact figures. 

“Some people will always feel uncomfortable when you try and introduce change,” he says. 

Critics of the scheme include Herald Sun columnist Scott Pape (the Barefoot Investor), who in his latest blog claimed the idea that you can “‘group buy’ a home loan for thousands of people is ridiculous”. 

“Anyone who has applied for a mortgage knows the bank determines your rate by taking into account your personal income, equity and credit history,” Pape says. 

Most of Pape’s criticism was directed at consumer group Choice, which Pape says has “sold its soul” by getting involved in a venture “which share in the kickbacks that the banks will pay them for each punter they put through”. 

Similar concerns about Choice involvement have been expressed by the Mortgage and Finance Association of Australia. 

While supportive of the scheme and Choice backing it, MFAA chief executive Phil Naylor questioned Choice’s commercial involvement in an industry in which it has previously performed impartial advocacy.

Choice will earn a referral fee from each One Big Switch subscriber who takes up a lender offer. However, the consumer watchdog claims the money will be used to recover the costs of running the campaign.

Earlier the ABA issued a press release calling the scheme a “gimmick” and claimed bank customers would be better off talking directly with their bank if they’re not satisfied with their current mortgage. 

Harris says the more borrowers who sign up the better the deal they will be offered. 

Lenders of all sizes will be able to compete for mortgage business from those who have signed up but borrowers will be under no obligation to take up the offer. 

Harris says discussions with lenders are ongoing but will not say how many have expressed interest in getting involved.