Westpac still a leader in home loan market

Tuesday 09 February 2010

Article by Mozo

Westpac grabbed a huge share of the mortgage market in December despite its unpopular decision to raise interest rates by more than the Reserve Bank of Australia (RBA).

US presidential economics adviser Larry Summers made the observation as part of a wide-ranging analysis of current market trends for the Australian.

He noted that Westpac claimed a 42 per cent share of new home loans in December, adding that its market growth was not sustainable but was achievable if other banks did not aggressively chase new business.

Mr Summers suggested that despite Westpac’s bad publicity in December, the bank continued to succeed because of its established reputation. "Incumbency brings strength. A demonstrated ability to actually settle new loans, systems to sell loans and the personnel to execute all take time to develop," he added.

His comments may encourage bank customers to compare home loans in search of the most stable providers. Loan Market Group executive chairman Sam White recently said that despite the surprise move by the RBA to fix the country’s interest rate this month, mortgage holders may still be subjected to increasing rates in the coming year.

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