A new report has revealed that Australia’s customer-owned banks are delivering excellent home loan rates and high-quality service for their customers, all while generating positive outcomes for the wider communities they serve. Despite these advantages, three-quarters of Australians still do not know what customer-owned banking means.
“Customer-owned banks are Australia’s best kept secret when it comes to your finances,” Customer Owned Banking Association (COBA) CEO Michael Lawrence explained.
“They deliver competitive rates, outstanding service and placing your money with a mutual means more growth for the wider community.”
The Assessment of the Impact of Customer-Owned Banks in Australia 2026 report, developed by EY Australia, found that basic variable home loan rates from the 25 largest customer-owned banks are between 0.25% and 1.05% lower than those offered by the major banks1.
“Customer-owned banks play an important role in supporting competition within Australia’s concentrated banking sector. They operate predominantly in the home lending space which delivers competitive pricing and meaningful savings to borrowers,” EY Parthenon Partner Robert Feeney said.
With the national average mortgage now sitting at approximately $736,0002, securing a rate that is 1.05% lower saves a borrower roughly $7,728 in interest over the course of a single year. Even if a borrower secures the more conservative 0.25% reduction, they will still save $1,840 annually in interest charges.
Moreover, customer-owned banks have consistently maintained customer satisfaction ratings above 80% for the last 20 years.
“Our sector is known for its people-first approach. They treat you as more than just a number, ensuring that genuine care and community focus sit at the heart of every interaction,” Mr Lawrence added.
Many customer-owned banks focus on specific professions or regions, allowing them to provide highly tailored services. Teachers Mutual Bank, for example, applies credit assessment parameters that differ from those of major institutions. By factoring in salary packaging and casual employment arrangements, they achieve a more nuanced evaluation of diverse income streams, and this approach effectively supports groups, such as teachers and other essential workers, often underserved by the broader banking sector.
Unity Bank follows a similar approach, issuing its award-winning Essential Worker Home Loans primarily to teachers (33%), nurses (22%), and paramedics (10%). These competitive offerings contribute to high consumer engagement, with 42% of Australians identifying rates and pricing as the key differentiator for customer-owned banks according to the report.
Additionally, many regional mutual banks leverage their deep local expertise to help residents secure home loans for specific properties which provides further support to those who bank customer-owned.
In the last year alone, the sector contributed approximately $2.6 billion to the Australian economy through wages, taxes, and reinvested profits according to the report. Importantly, these mutual profits remain entirely within Australia.
“That $2.6 billion represents real jobs and local investment,” Mr Lawrence explained.
“When you choose a mutual bank, your money doesn’t go to offshore shareholders – it stays right here in Australia to build up your own community.”
However, a recent survey3 showed 74% of Australians don’t know what customer-owned banking means. This lack of awareness leaves millions missing out on a fundamentally fairer financial system.
The mutual model is designed entirely around the customer where every dollar of profit is reinvested directly back into the institution to deliver lower fees, competitive interest rates, and important community initiatives.
By contrast, shareholder-owned banks in Australia are owned by external investors and public shareholders, with governance and strategic decisions primarily focused on delivering shareholder returns and maximising profitability’.
The Assessment of the Impact of Customer-Owned Banks in Australia 2026 is available here.
To find a customer-owned bank that fits your values and needs, head to Findabank.com.au.
ENDS
For further information or to arrange interviews, please contact Mira Palomaki on 0459 954 035 media@coba.asn.au
The Customer Owned Banking Association is the industry body for mutual banks, credit unions and building societies. For almost 180 years our sector has put customers first, returning profits to more than 5 million Australians who put their trust in customer-owned banks.