New Zealand customers of Wizard Home Loans, whose Australian branch has been sold to ASB Bank owner Commonwealth Bank of Australia, will miss out on a big rate cut and are being encouraged to refinance with another lender.
Yesterday, CBA said it would acquire a A$2.25 billion ($2.84billion) portion of Wizard Home Loans' Australian portfolio from owners GE Money. CBA also said it would pass on a 100 basis point cut to interest rates to the Wizard home loans it was acquiring.
However, Wizard's 4000 New Zealand customers with loans totalling $1 billion are not included in the sale. GE Money said in December it was closing down its 25-branch New Zealand operation at cost of about 80 jobs. It said the global financial crisis was forcing it to pull back from the Australasian home loan and car finance markets.
With the closure of the Wizard operation in New Zealand, the loans would be administered from GE Money's Sydney office.
While Wizard's New Zealand customers have complained about a range of GE Money's lending practices, including inflexibility on any changes to home loans, the company announced a three-month waiver on fees normally charged when customers wanted to break their loan agreement, "to assist them to move to another lender", said GE Money spokesman Tristan Everett.
The Australian Wizard mortgage portfolio being acquired by CBA comprises prime mortgages that meet the bank's strict lending criteria and are 100 per cent mortgage insured, with a maximum loan to valuation ratio of 90 per cent.
GE Money's Wizard Home Loans subsidiary was sold to John Symond's Aussie Home Loans and CBA on Christmas Eve. The deal will be completed on Friday.
CBA is a 33 per cent shareholder in Aussie Home Loans.
