Over the last few weeks, One Big Switch has been emailing out offers to the 40,000 Australians who signed up for their Choice Big Switch Campaign. Here at Spank Your Bank we’ve seen a mix of very positive and very negative feedback towards the campaign and so we wanted to write in a little more detail about how it has affected the market and also what it has meant for Australians with mortgages.
It appeared during the early stages of the campaign that people were mainly concerned about who One Big Switch would approach for loans and also what sort of offers they would get. Not surprising considering the different loan situations most people have.
According to One Big Switch, lenders across Australia were invited to put up offers. However it was the smaller non-bank lenders who came forward with the best offers – Resimac, MortgageEzy, First Mac and IMB Building society were among those who offered One Big Switch home loan deals that were worth presenting to their customers.
The 40,000 people who signed up for One Big Switch’s deal are now in the final stages of considering whether or not the offer is an improvement on their current situation.
The offer that they received is actually a choice of loan offers which vary in style. Some of them have lower interest rates but higher fees, some the other way round and some with re-draw. This leaves potential switchers with quite a bit of calculating to fiddle with.
To help with this One Big Switch sent their customers to the Money Smart Mortgage Switching Calculator (one of our new favourite links), which makes the calculating easily do-able and allows you to fiddle around with plenty of minor details.
Also, as most of these offers did come from smaller lenders who don’t always offer the same banking facilities as the bigger lenders, calculating whether or not the switch is worthwhile gets a little more fiddly because banking convenience (among other things) also needs to be factored in.
If it turns out that an offer is worthwhile (and for some, they certainly have been), Switchers now need to put in their application to re-finance – a process even more painful (in my opinion) than getting a loan in the first place. But also a process that is definitely worth it because, if your bank is not doing you a good deal, then you should be walking away.
Some of the 40,000 who signed up say it has definitely been worth while as they have been offered a better deal with their existing lender after presenting their One Big Switch offer. So without the mess of switching, they’re going to save $1000s on their mortgage simply for signing up to the campaign. And, I must say, “kudos to One Big Switch” for applauding people who got these deals when they get nothing in return for their work.
However, some potential switchers have come out with a negative view on the exercise. One stated on Facebook, “Was a disappointing outcome– they are all small no-name lenders and the deal would only save me $50/month compared to commonwealth — not worth switching.”
One Big Switch was quickly defended by other Facebookers who replied,
“I guess it all depends. Some people drive for 10 minutes just to get 2¢ off their petrol. Other people complain about a Great Big New Tax on Everything™ even though it costs me 50¢/day to cut 100% of my carbon emissions on residential electricity. And if your home loan is currently with UBank, there’s a large chance that it’s not worth changing 
”
and,
“Correct me if I am wrong but $50 a month = $600 a year = $18k over a 30 year loan doesn’t it? Who doesn’t think $18k is worth switching for?”
I would absolutely kill for an extra $50 a month. Having said that, the disappointed switcher didn’t go into detail as to whether the $50 he saved on the loan would cost him in other areas or not.
A part of me gets very excited at the thought of so many people moving away from the big banks to smaller lenders (even though a lot of these lenders are still backed by the same people). It feels like we’d be making a move against the dominant market of the Big Four – who, might I add, did not step up to the plate with the best offers – thus creating a genuinely competitive market.
At the same time, I understand the convenience of sticking with the big four and being able to keep all your banking in the one place – the ability to instantly transfer between my mortgage and my credit card has definite appeal.
I prefer to blame the Big Four for not coming up with reasonable deals. Why didn’t they? Was offering a better deal going to get in the way of their profit regime? In fact, I’d go spank them about it 
Another thing I have appreciated about One Big Switch is the speediness of their response to enquiries and also their frankness in regards to their price tag as a part of playing this game. There’s an honesty there which is not commonly seen in the home loan industry.
One Big Switch has certainly caused a huge stir in the market and rates are coming down everywhere. So if their home loan deal wasn’t for you, don’t despair. Instead, give your current bank a Spank and keep working towards getting a better deal.
It is really important to us at Spank Your Bank that Australians get a fair deal when it comes to banking. So, we’d like to hear your feedback on One Big Switch. Has this been a good experience for you? How have you reacted to the offers? What do they mean for you? Have you decided to take it up? If yes, how is the refinancing process going?
In the meantime, we’ll hold our breath and look forward to seeing the results for everyone in the coming weeks.
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