Banks may put a lot of work into bolstering their reputation, but at the end of the day home loan borrowers care more about low interest rates and how much they can borrow.
This is among the findings from interest.co.nz's inaugural mortgage broker survey. Borrowers, it seems, are much more interested in getting low interest rates and how much they can borrow than they are in their lender's reputation.
The survey asked mortgage brokers a series of questions, with the survey taking place between the end of February and the end of March. One of the questions addressed what mortgage brokers' customers mainly look for in a lender. Mortgage brokers were asked to tick as many of the 10 options suggested as they wanted to in response.
'Best rates' came out on top with 89% of respondents. Second, at 77%, was 'loan approval amount.' Third, at 38%, was 'upfront incentives,' followed by 'time' and 'less scrutiny on expenses' with both coming in at 36%.
Next was 'prior relationship with banks' at 31%, 'better loan structure' at 21%, and 'technology' at 18%.
Scoring just 11% was 'the reputation of the bank,' with 'other' on 9%.
Regional breakdowns from the survey turn up some interesting quirks. For example, among Auckland-based respondents 94% chose loan approval amount. Whilst this option was picked by 85% of Wellington respondents, this dropped to 66% in Christchurch, 64% in 'other cities,' and was 74% in 'towns and rural areas.' This may, of course, highlight higher house prices in Auckland and Wellington.
At 43% Auckland respondents were the biggest pickers of the less scrutiny on expenses option. And just 2% of Auckland respondents picked the reputation of banks option, well below anywhere else. Meanwhile, perhaps not surprisingly given they're smaller communities, 43% of town and rural respondents ticked the prior relationship with banks options, well above the scores for this option in the major cities.
| % | ||
| Best rates | Yes | 89% |
| No | 11% | |
| Time | Yes | 36% |
| No | 64% | |
| Loan approval amount | Yes | 77% |
| No | 23% | |
| Upfront incentives | Yes | 38% |
| No | 63% | |
| Better loan structure | Yes | 21% |
| No | 79% | |
| Less scrutiny on expenses | Yes | 36% |
| No | 64% | |
| Reputation of banks | Yes | 11% |
| No | 89% | |
| Technology | Yes | 18% |
| No | 83% | |
| Prior relationship with banks | Yes | 31% |
| No | 69% | |
| Other | Yes | 9% |
| No | 91% | |
Banks do a wide array of things for public relations and reputational purposes. Examples include donations to support victims of the recent extreme weather events, obtaining Rainbow Tick certification to highlight diversity and inclusion in their workplace, sustainability reporting, or pledging no mortgagee sales of owner-occupied family homes as ASB did in 2021.
But at the end of the day it seems what counts most with borrowers is how much they have to pay for their loan and how much they can borrow.
Banks included in the survey questions were ANZ, ASB, BNZ, Kiwibank, The Co-operative Bank, Heartland Bank, HSBC, SBS Bank, TSB and Westpac.
The survey was conducted by Curia Market Research by email and text. There were 160 respondents.
Interest.co.nz will be running stories every day this week based on the survey results.
Next: Refinancing, maximum borrowing capacity & borrowers getting stuck with their current lender.
This analysis was first released in the Banking & Finance Daily Newsletter, a subscription newsletter for senior finance industry executives. You can subscribe here.