Bendigo Bank home loan customers are the most satisfied with their bank, followed by ING, Macquarie and Suncorp

“Home loan customer satisfaction for Australia’s top 12 banks was at 78.6% in March 2022, down slightly from a year ago in March 2021 (79.6%) but still up significantly from February 2020 (74.8%) – the month before Australia went into a nationwide lockdown at the beginning of the pandemic.

“The high home loan customer satisfaction during the past two years, and the worst public health crisis in over a century, illustrates the importance of the response by banks to support borrowers who faced a sudden loss of income due to the restrictions imposed throughout the country.

“The financial support provided by government, along with the ‘mortgage holidays’ provided to borrowers facing financial stress by banks and financial companies, has helped keep the Australian economy performing strongly and supported the housing market during this crucial period.

“The latest home loan customer satisfaction rankings show Bendigo Bank has emerged from the two years of the pandemic with the highest – and rising – home loan customer satisfaction of all at 91.2% – an increase of 1.3% points on a year ago. The other banks to experience an increase in customer satisfaction were Macquarie in third place on 86.4%, up 7.6% points on a year ago and Suncorp on 86.2%, up 3.2% points on March 2021.

“There were several other banks with highly impressive home loan customer satisfaction ratings including ING on 89.6%, Bankwest on 84.6%, St. George on 80.5% and Commonwealth Bank on 77.8% – the highest rating of any of the ‘big four’ banks.

“As we head further into 2022 there are new challenges facing those with home loans and their banking and financial institutions – rising inflation and interest rate increases.

“This week the RBA raised interest official interest rates by 0.25% points to 0.35% – the first time the RBA increased the cash rate in over a decade since November 2010. Many current mortgagors have never experienced a cycle of increasing interest rates and the increase in payments they are facing will be a new experience for many.

“The latest ABS CPI (Consumer Price Index) figure for the 12 months to March 2022 showed Australian inflation rising to a 20-year high of 5.1% – and it’s expected to continue increasing over the next few months. The expectation of higher inflation to come means the RBA is set to deliver a series of interest rate increases during the remainder of 2022 and mortgage payments will increase each month the RBA adjusts the official cash rate higher.

“The last time the RBA increased interest rates was over a one-year period from October 2009 – November 2010 after the Global Financial Crisis of 2008-09. The RBA increased interest rates from a GFC ‘emergency low’ of 3% seven times, and by a total of 1.75% points, to a decade high of 4.75%.

“If the RBA increases interest rates by a similar amount during the next year, CoreLogic² estimates the average monthly loan cost for a new owner occupier borrower of an average priced house will increase by almost $670 per month – rising to around $720 per month for someone in Melbourne and just over $1,000 per month for someone in Sydney – Australia’s most expensive housing market.

“The prospect of high inflation, increasing interest rates and rising mortgage loan repayments for millions of Australians during the next year provides a new challenge for many but also presents new opportunities for banks and financial institutions to appeal to customers who may be unhappy with their current mortgagee and looking for an alternative.”