They're not exactly quaking in their boots at the prospect of mortgages from the People's Bank.
Comments by mortgage lenders and brokers spoken to by Good Returnsyesterday ranged from "It's an awfully good way of throwing away $80 million" to statements welcoming more competition through to doubt that people would switch their mortgage and other financial business just to save a predicted $10 a month in fees. One broker pointed out that many lenders already reduced or even waived transaction fees in some cases, customers with mortgages being a prime example.
There were those who thought it was too early to comment - Bank of New Zealand, for one - while others cited what they saw as already a fiercely competitive mortgage market and a growing presence from New Zealand-owned mortgage originators.
Specific comment included:
Cynthia Brophy, Corporate Affairs for the National Bank: "There are 18 registered banks in New Zealand and we have a healthy and competitive banking environment. We've been competing in this environment for over 125 years and we just see this as the entry of another competitor."
Rob Tucker, Chairman, New Zealand Mortgage Brokers Association: "It's early days yet, but if it's a people's bank where the only business transacted is with people, then mortgages are a natural extension. What we can't see is how they can do it at any better pricing then currently offered in the marketplace. They will be competitive, but it's unlikely that they will be any more so than those already in the market because they're all pricing off the same base."
William Cairns, Director of mortgage bankers Cairns Lockie: "There are already nine or ten building societies, numerous credit unions (with many of them operating in regional areas), TSB Bank in New Plymouth and increasing numbers of New Zealand-owned mortgage originators coming into the market. There's already a lot more going on in this market than people realise. And if you go in for a mortgage, are they going to have mortgage specialists at each branch?"
Lindsay Hore, National Manager Mortgage Services for Forsyth Barr: "They're not going to be able to build deposit funds to a level where they're self-sufficient, so they will be buying money offshore like anyone else. And no way will that be at a better rate."
