Mortgage complaints spike by 20%

Photo by Santiago Lacarta on Unsplash

The number of complaints about home loans in Australia has risen significantly amid issues with responsible lending and failures to provide assistance.

That's according to new data released by the Australian Financial Complaints Authority (AFCA), which found home loan complaints rose by 20% over the last six months of 2019 compared to the previous six months. 

There were 2,201 mortgage complaints in that time, or 367 per month on average. 

That's about a dozen a day. 

The increased complaints come despite not one, but three cash rate cuts of 25 basis points occurring in that time frame. 

AFCA Chief Operating Officer Justin Untersteiner said that it was disappointing to see an increase in complaints, but maintained that data transparency is important. 

"Every six months, AFCA releases data which allows Australians to see how many complaints their insurer, bank, financial adviser, superannuation fund or other financial firm has received and how they have responded to those complaints,” Mr Untersteiner said.

"Rebuilding trust in the Australian financial services will be a long journey and one that requires effort across the entire sector."

Thinking about refinancing to a low-rate, variable owner-occupier home loan? The table below displays some of the lowest-rate variable home loans currently on the market for owner occupiers:

Mr Untersteiner said the "dramatic" increase in complaints was driven by:

• Lenders failing to respond to requests for assistance 
• Issues with responsible lending, and
• The conversion of loans from interest-only repayments to principal and interest. 

"The data also shows that we are getting very few complaints about financial advice, just 30 per month, and complaints against debt buyers or collectors rose by just five per cent," he said. 

"Our hope by releasing this data is that we see improvements and the industry takes action to reduce the number of complaints that end up at AFCA.”

Home loans weren't the most complained about product however: That dubious honour goes to credit cards, which attracted more than 2,700 complaints. 

Home building insurance was the most frustrating insurance product meanwhile at 1,445 complaints. 

Three of the big four banks led the charge for complaints, with CBA, ANZ and NAB attracting 3,404, 2,343 and 2,165 complaints respectively across various products. 

Westpac on the other hand came fifth, one place behind insurer AAI.

In terms of location, most of the complaints came from customers in New South Wales with 6,266. Comparatively:

• Victoria had 5,557
• QLD had 3,610
• WA had 2,046 
• SA had 1,115 

---

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

• All eyes on RBA ahead of cash rate decision next week January 28, 2022
• How to save money on groceries January 28, 2022
• Macquarie Bank lifts term deposit rates for the second time in as many weeks January 28, 2022
• Consumer group calls for crackdown on short-term payday lending January 28, 2022
• Plenti wants to turn dreams into reality with its personal loans January 28, 2022