We thought we’d do a bit of analysis of the 1,500 mortgage reviews we did over the past 3 months. I don’t have a lot of spare time so we grabbed a sample of 150 of our mortgage reviews and ran some numbers.
This first graph shows share of reviews versus market share of housing. The hypothesis here is that only people who feel they may be missing out (or have the wrong structure) will want a review. Overall Kiwi Bank customers felt in more need of a review.
We then went and qualitatively scored the structure of each mortgage. We scored a 1 for people who got their rates right (with good structures) and a 5 for solutions that were “poor.” Amongst the banks ANZ scored best at 2.8 and Kiwi Bank worst 3.4.
Last up we thought we’d look at the proportion of “poor” mortgage advice. Our interpretation of this was basically anyone who took a 3-5 year fixed rate in 2008 ( There was a degree of leniency for customers that split their mortgage across multiple fixed rate terms.) Kiwi Bank and BNZ stood out and this isn’t surprising because both have had a rate focus and both have advertised long-term rates at the top of the interest rate cycle.
Kiwi Bank’s standard response to this is that they are simply “retailers” and take no responsibility for how customers decide to structure their mortgages. Some time in the next few weeks I’ll quantify the actual cost of poor advice.
Who are we?
Squirrel is an independent Mortgage Broking and Advisory business. We are happy to help you get the best out of your mortgages whether that is buying property, refinancing or simply restructuring everything to make it work better. Have you thought about doing a review of your current mortgage. If you are buying a new home then you can apply online with us and we’ll save you a bucket load of money, time and stress.
