Greater Bank has reported an increase in the share of its customers who are ahead on their mortgage payments.
As of the end of January, the bank said that 75.9% of its 32,561 home loan customers were at least one month ahead on their repayments. This was higher than the average of 71.5% the bank recorded over the five years leading to 2020.
Scott Morgan, chief executive officer of Greater Bank, said that customers are finding greater value in making extra repayments on top of their monthly dues as opposed to depositing into their savings accounts.
“Customer research that we undertook in November last year highlighted that paying off their home loan sooner was the number one financial priority for our customers,” he said.
Morgan added that paying extra on top of their monthly repayments allows borrowers to reduce their overall debt and term of their loan.
To illustrate this, he said borrowers with a 30-year $300,000 mortgage can save $16,000 and reduce the loan term by up to two years and 11 months by paying an additional $20 per week.
And while acknowledging Australians’ spending habits and financial priorities have changed amid the uncertainties caused by the COVID-19 pandemic, Scott said he still believes that market conditions remain favourable to borrowers.
“While COVID-19 placed financial stress on many customers, it also provided an opportunity for us to work closely with those affected to ensure they remained financially secure through the pandemic,” he said.