To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
Major bank ANZ has announced that it has extended its current up to $3,000 switching cashback discretion to 30 July 2021.
ANZ also stated that eligible loans must now be drawn down by 31 October 2021. This has been extended from the previous deadline of 30 June 2021.
It noted that the cashback offer is not a new campaign. Rather, it said that it is extending the application end date and loan drawdown date for the current switching cashback discretion period, and added that the other eligibility criteria continue to apply.
In 2020, the lender announced that a higher cashback amount of $4,000 would be available for eligible customers refinancing home lending of $250,000 or more from another financial institution.
It then reduced the offer on loans of $250,000 or more from $4,000 to $3,000, while loans between $150,000 but less than $250,000 are still eligible for the switching amount of $1,200.
ANZ also extended the drawdown date for these home loans last year.
Meanwhile, digital bank 86 400 has announced that it has extended its $2,000 cashback offer for purchases and refinances on own home loan applications.
It said that the offer applies to applications received by 31 May 2021, and settled by 31 July 2021.
The lender stated that the minimum loan amount is still $250,000 and is limited to one cashback per primary borrower regardless of the number of loans.
Additionally, the cashback will be paid into an 86 400 pay account within 14 days of settlement, it said.
The digital bank launched the cashback offer last year, at which time national manager of broker distribution George Srbinovski told The Adviser that he remained confident that the lender would be able to continue delivering average turnaround times of within 24 hours.
He said: “We are very, very confident we can maintain our service levels. Currently, our service levels are, on average, 24 hours. We are geared to continue on with that 24-hour service level.”
The issue of turnaround times at the major banks had been a point of focus at recent Parliamentary hearings, where ANZ, Westpac, National Australia Bank (NAB) and the Commonwealth Bank of Australia (CBA) acknowledged that slower turnaround times in the broker channel compared to the direct channel is an issue.
They said that while customers can expect turnaround times of as fast as an hour or a day through the direct channel, they can extend up to 12 days in the broker channel.
Following the hearings, the Mortgage & Finance Association of Australia (MFAA) said that data provided by two major broker aggregators disputed the figures provided by the major bank CEOs at the hearings on turnaround times through the broker channel, with data showing that borrowers applying for loans through a broker are waiting a median of 23 days for unconditional approval.
The association also quoted figures from Connective, which showed that the median unconditional approval times for loans approved in the recent past was 23 days, with median turnaround times ranging from 19 to 36 days at the major banks.
Finance Brokers Association of Australia (FBAA) managing director Peter White told The Adviser that “certain major banks claim that over 60 per cent of loan submissions are incomplete and are pushed back to brokers to fix the issues”, while others had claimed “greater complexities with meeting best interests duty”.
“However, this is BS, as that obligation is on the broker (not the lender), so this is where an anticompetitive environment is creeping in and favouring branch processing times over brokers,” Mr White said.
“We have expressed strong concerns about this to government, and we are currently exploring options of taking action via the ACCC.”
The Australian Finance Group (AFG) Index for April 2021 revealed that lender turnaround times increased from 25.2 days in the second quarter of the 2021 financial year (2QFY21) to 27.1 days in 3QFY21.
Last year, the increase in demand for refinancing – particularly amid the range of cashback offers by different lenders – was partly attributed to delays in turnaround times.
[Related: Majors taking growing share of mortgages]