Mortgage wars Groundhog Day: Mark Bouris and John Symond turn back the clock as they take on the banks
There’s a distinct feeling of déjà vu in the air, with non-bank lending pioneers Mark Bouris and John Symond both launching campaigns urging borrowers to consider alternatives to the major banks following the interest rate increases of the last few days.
On Sunday night Aussie kicked off its new advertising campaign fronted for the first time in five years by chairman and founder John Symond.
In the new campaign, which runs with the tagline “It’s smart to ask”, Symond urges consumers and borrowers to question and challenge their current financial providers, specifically banks, in an effort to review and choose a financial product or service.
The new ad kicks off with Symond asking: “Is your current home loan the right one for you today? It’s smart to ask, the fact is things are more competitive today, you can save thousands but you need to make the right choice.”
He then goes on to say: “You could ask your bank, but would they tell you if a competitor had a better product? We will.”
Yellow Brick Road’s Mark Bouris, who famously competed with John Symond when he built up non-bank lender Wizard in the late 1990s and early 2000s (until selling it to GE Money for $500 million in 2005), has also gone on the offensive against the major banks.
Speaking on Eddie Maguire’s Triple M breakfast radio show today, Bouris said the banks had given smaller lenders like Yellow Brick Road and others “such an opening”.
“If this was AFL or rugby league I would be kicking goals or scoring tries,” he said, perhaps harping back to the days when Wizard sponsored both the NSW State of Origin side and Collingwood Football Club.
“The bottom line is my interest rate is 6.83% and the banks’ is 7.36% and that over 25 or 30 years you could save $40,000.
“If that’s not the most compelling reason to shop around and look for a better deal, I don’t know what is.
“There are small banks, there are credit unions, there are non-bank lenders like my business, Yellow Brick Road, offering better deals then the big four banks,” he said.
Bouris says the problem is that all anyone ever talks about is the big four banks.
“We are all doing them a big favour by talking about the big four… There are other places to go to.”
Bouris says it’s no harder to get a loan from a credit union, building society or non-bank lender than it is from a major bank if you qualify for it.
Bouris admitted that funding costs for new lending had risen but said this game was about averaging and smoothing out your costs, not just passing them on to your customers.
Along with Yellow Brick Road director Christopher Joye, Mark Bouris has taken his campaign against the major banks online and in the print media, warning that the financial system is more at risk by being reliant on four $50 billion banks. Bouris and Joye suggest Australia would be better off with 10 banks worth $20 billion, “each small enough to fail without causing widespread damage”.
Competition between Bouris and Symond for mortgage customers reached its zenith in about 2003 when Aussie was writing about $600 million a month in new mortgages and Wizard had a mortgage book worth about $6.5 billion and about 300 franchise offices.
Aussie Home Loans acquired the Wizard franchise network from GE Money in 2008 during the height of the GFC for an undisclosed sum believed to be a fraction of what GE spent on buying it from Bouris in 2005.
Just before Aussie acquired Wizard, the Commonwealth Bank acquired a third of Aussie for about $70 million.
In 2002 Aussie changed its business model from a non-bank lender offering Macquarie Bank-backed loans through its PUMA program to that of a mortgage broker offering a range of loans from different lenders including the major banks.
In 1995 Symond was the face of Aussie Home Loans, kicking off its famous “We’ll Save You” ad campaign with the question: “You work hard for your money, so why give it to the banks?”
“I want you to ring your bank and demand a better deal… If they won’t come to the party, ring us.”
Yellow Brick Road remains a non-bank lender and receives its wholesale funding from Gateway Credit Union.
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