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The Adviser puts the nation’s leading line of credit mortgages under the spotlight
LINE OF credit mortgages have long been popular with investors who are looking for product flexibility and the ability to move quickly to capitalise on market opportunities.
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In recent times, they have become increasingly popular with other borrowers who are looking for an effective mortgage reduction tool.
As part of our regular product review, The Adviser has joined forces with leading data analyst Pisces Group to rank Australia’s leading line of credit mortgages from the major, second-tier and non-bank lenders.
In ranking the nation’s lenders and their line of credit products, Pisces applied a process that considered not only the product specifics – such as interest rates, discharge fees and other quantitative measures – but also the perception of brokers, including their thoughts on servicing times and overall policy.
The nine line of credit mortgages under review comprised the following:
AMP – Pro-Pack Line of Credit
ANZ – Equity Manager
CBA – Line of Credit
ING DIRECT – Action Equity Loan
MACQUARIE BANK – Mix & Match Line of Credit Account
ADVANTEDGE – Pro-Pack*
ST GEORGE – Portfolio Loan
SUNCORP – Asset Line
WESTPAC – Equity Access Loan
Westpac’s Equity Access Loan performed strongly both in broker sentiment and product metrics reviews.
Despite that solid performance, however, the lender finished second overall, pipped at the post by one of Australia’s second tier lenders, Macquarie Bank.
Macquarie performed well across the various product metrics and also rated highly on the human elements that are so important to brokers.
Macquarie’s strong performance comes as a bit of a shock, given that the lender was not even an active participant in the mortgage market just 12 months ago.
Since re-entering the market in February 2010, Macquarie has managed to stake out its position as a genuine alternative to the major banks, overcoming last year’s favourite, Westpac.
Looking back at that ranking, Westpac managed to outclass the other lenders to claim the top position, beating its nearest rival, ANZ, convincingly.
In fact, the major managed to claim first place in three of The Adviser’s six product rankings: line of credit, basic product and pro-pack.
However, with two out-of-cycle rate rises under its belt and Macquarie Bank firmly established in the market, it remains to be seen whether Westpac will do as well in 2011.
BROKER COMMENT
Davlin Finance Group broker David Linco says Macquarie Bank’s line of credit mortgage was a standout performer in the market.
When offering a line of credit product to a client, Mr Linco says it is important that the product is simple for investors to use.
It also must have a cash-out function.
“Macquarie make life easy for property investors with their Optimum Line of Credit, which allows multiple accounts splits and the option to fix as well,” he says.
“Cash-out rules are becoming more important. We are placing business with funders who understand clients’ goals.”
