Customer-Owned Banking Trends In 2017: Mutual Banks, Credit Unions, Building Societies, And More

What Australians need to know about customer-owned banking in 2017, based on Canstar’s expert analysis and awards.

Plenty of people want to look further afield than Australia’s Big Four banks for their next home loan, credit card, savings account, and other financial products.

These days customer-owned institutions such as mutual banks, credit unions, building societies, and other member-owned institutions offer a compelling alternative to the major banks traditionally favoured in Australia.

Look no further than the Canstar website to find out where you can get outstanding value customer-owned banking in 2017. Check out the reasons why Bank Australia is our award winner in 2017, or read on to find out what trends Canstar has seen in this year’s customer-owned banking research.

Compare Customer-Owned Banking Institutions

Customer-owned institutions vs Banks

Customer-owned institutions and banks are by nature different because customer-owned institutions are run to benefit customers rather than to profit shareholders. But on a more nitty gritty level, how do customer-owned institutions and banks differ in terms of what they can offer to customers?

Canstar’s Research team has analysed what’s on offer from customer-owned banking institutions and banks for home loans and credit cards below…

Interest rates from customer-owned institutions

At the same time as banks are changing interest rates on home loans and credit cards (with or without a rate cut), many customer-owned banking institutions are also adjusting their rates.

Residential home loans with customer-owned vs bank lenders

As you can see from the table below, customer-owned institutions on average offer lower interest rates across almost all variable and fixed rate loan terms for residential home loans.

Table 1: Customer-Owned Vs Banks: Snapshot of Residential Home Loans Market (Principal & Interest loans) (29/05/2017 – 06/06/2017)
Credit Unions, Building Societies, and Mutual Banks
Basic Variable Standard Variable 1-Year Fixed 2-Year Fixed 3-Year Fixed 5-Year Fixed
Min 3.77% 3.79% 3.64% 3.64% 3.59% 3.99%
Average 4.27% 4.55% 4.12% 4.07% 4.14% 4.56%
Max 4.81% 5.43% 5.04% 4.95% 5.05% 5.14%
Average Movement 0.10% 0.12% 0.12% 0.12% 0.12% -0.04%
Banks
Basic Variable Standard Variable 1-Year Fixed 2-Year Fixed 3-Year Fixed 5-Year Fixed
Min 3.78% 3.74% 3.69% 3.88% 3.74% 4.19%
Average 4.31% 4.67% 4.19% 4.13% 4.15% 4.60%
Max 5.49% 5.73% 4.64% 4.60% 4.64% 5.14%
Average Movement -0.20% -0.05% -0.05% -0.05% -0.13% -0.08%
Source: www.canstar.com.au

The search results do not include all home loan providers, and may not include all features relevant to you.

Based on residential home loans available for $350,000, LVR 80%, and available for Principal & Interest only.

You can compare your options for residential home loans from customer-owned institutions and the banks using the Canstar home loans comparison website:

Compare Home Loans: Customer-Owned Vs Banks

Investment home loans with customer-owned vs bank lenders

Table 1: Customer-Owned Vs Banks: Snapshot of Investment Home Loans Market (Principal & Interest loans) (29/05/2017 – 06/06/2017)
Credit Unions, Building Societies, and Mutual Banks
Standard Variable 1-Year Fixed 2-Year Fixed 3-Year Fixed 5-Year Fixed
Min 3.99% 3.89% 3.82% 3.94% 4.49%
Average 4.90% 4.40% 4.35% 4.41% 4.83%
Max 5.85% 5.04% 5.09% 5.09% 5.24%
Average Movement 0.21% 0.00% 0.07% 0.07% -0.03%
Banks
Standard Variable 1-Year Fixed 2-Year Fixed 3-Year Fixed 5-Year Fixed
Min 4.09% 3.99% 3.88% 3.99% 4.39%
Average 5.22% 4.39% 4.35% 4.40% 4.79%
Max 6.20% 4.99% 4.79% 4.84% 5.34%
Average Movement 0.30% 0.00% 0.00% 0.07% 0.00%
Source: www.canstar.com.au

The search results do not include all home loan providers, and may not include all features relevant to you.

Based on investment home loans available for $350,000, LVR 80%, and available for principal and interest only.
Table 2: Customer-Owned Vs Banks: Snapshot of Investment Home Loans Market  (Interest Only loans) (29/05/2017 – 06/06/2017)
Credit Unions, Building Societies, and Mutual Banks
Standard Variable 1-Year Fixed 2-Year Fixed 3-Year Fixed 5-Year Fixed
Min 4.19% 3.89% 3.95% 3.94% 4.49%
Average 4.94% 4.40% 4.39% 4.44% 4.85%
Max 5.96% 5.04% 5.09% 5.09% 5.31%
Average Movement 0.28% 0.30% 0.30% 0.30% 0.40%
Banks
Standard Variable 1-Year Fixed 2-Year Fixed 3-Year Fixed 5-Year Fixed
Min 4.32% 3.99% 3.88% 4.09% 4.39%
Average 5.36% 4.53% 4.48% 4.56% 4.91%
Max 6.20% 4.99% 4.86% 4.96% 5.44%
Average Movement 0.14% 0.20% 0.20% 0.20% 0.20%
Source: www.canstar.com.au

The search results do not include all home loan providers, and may not include all features relevant to you.

Based on investment home loans available for $350,000, LVR 80%, and available for interest only.

You can compare your options for property investment loans from customer-owned institutions and the banks using the Canstar home loans comparison website:

Compare Property Investment Loans: Customer-Owned Vs Banks

Low Rate credit cards from customer-owned institutions

The table below shows the interest rates and fees charged at the time of writing for low rate credit cards from the customer-owned institutions we research and rate:

Table 3: Customer-Owned Vs Banks: Snapshot of low rate credit cards (12/06/17) 
Banks
Company Product Rate (% p.a.) Cash Advance Interest Rate Ongoing Annual fee ($/year)
ANZ Low Rate Platinum 11.49% 21.74% $99
Bank of Sydney Visa Classic 11.99% 19.49% $49
ME frank credit card 11.99% 11.99% $0
Bendigo Bank Basic Black Mastercard 12.24% 12.24% $45
ANZ Low Rate 12.49% 21.74% $58
Bank of Melbourne Vertigo Platinum 12.74% 21.49% $99
BankSA Vertigo Platinum 12.74% 21.49% $99
St.George Bank Vertigo Platinum 12.74% 21.49% $99
Suncorp Bank Clear Options Standard Card 12.74% 21.99% $55
Auswide Bank Low Rate Mastercard 12.99% 21.74% $75
Credit Unions, Building Societies, and Mutual Banks
My Credit Union Low Rate Visa 7.99% 11.99% $59
 Northern Inland CU Low Rate Visa Credit Card 8.99% 8.99% $0
Woolworths Employees CU Low Rate Credit Card 9.45% 9.45% $25
G&C Mutual Bank Low Rate Visa Credit Card 9.49% 15.49% $50
Victoria Teachers Mutual Bank Visa Platinum Credit Card 9.99% 19.99% $84
SCU Low Rate Visa Credit Card 10.49% 10.49% $30
Police Bank Visa Credit Card 10.76% 10.76% $30
ECU Australia Low Rate Visa Credit Card 10.95% 10.95% $48
Australian Military Bank Low Rate Visa Card 10.99% 19.99% $49
Select Encompass Credit Union Visa Credit Card 10.99% 10.99% $30
Source:www.canstar.com, Rates are current as of 12 June 2017. The search results only include personal, unsecured, low rate credit cards and may not include all features relevant to you.

You can compare Low Rate credit cards from many institutions including customer-owned and banks, using the Canstar website:

Compare Low Rate Credit Cards: Customer-Owned Vs Banks

And that’s not the only type of credit card Canstar researches and rates – compare your other options while you’re at it:

Compare Credit Cards: Customer-Owned Vs Banks

Moving with the times

The biggest trend we have seen over the past year has been that more customer-owned institutions than banks have been adopting digital wallets – and in particular, Apple Pay. While three of the Big Four banks have scorned Apple’s partnership requirements, customer-owned institutions have not been shy about moving with the times.

Roughly 1 in 2 customer-owned institutions has partnered with Apple Pay at the time of writing, with 38 out of 77 customer-owned institutions being listed on the Apple Website.

When you find an institution compatible with your favourite digital wallet apps, we can help you compare your options for accounts and cards from that institution. Naturally, digital wallet compatibility isn’t the only factor to consider when choosing financial products, which is why we also compare fees, interest rates, and features to match both your digital wallet and your real life budget:

Compare Credit Cards

Compare Savings Accounts

Compare Transaction Accounts

Find out which customer-owned institutions are the cream of the crop by checking our 2017 Customer-Owned Institution of the Year Award:

Customer-Owned Institution Of The Year Award 2017 - Canstar

Compare what’s on offer from customer-owned banking institutions using the Canstar comparison website:

Compare Customer-Owned Banking Institutions

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