Wizard offers borrowers 10 cent petrol discount

SYDNEY - Mortgage provider Wizard Home Loans is offering borrowers a 10 cent discount on each litre of petrol they buy, in a first for Australian lenders.

Wizard chairman Mark Bouris said today that petrol price increases so far this year were equivalent to three interest rate hikes by the Reserve Bank of Australia (RBA), in terms of their impact of home loan payments.

"Imagine if the Reserve Bank put rates up three times in the next month, it has the same impact on the family budget," he told AAP.

"There's a significant amount of extra costs getting loaded onto families with rising petrol costs."

Mr Bouris said petrol price rises tended to creep up on consumers, because they were more gradual than an interest rate hike.

"Over a period of six months all of a sudden you realise you're under water," he said.

Customers who take out a mortgage with Wizard between July 11 and September 9 this year will receive a 10 cent discount on each litre of petrol they buy for a period of one year.

The offer applies to all service stations, with Wizard providing the discount following the purchase.

Mr Bouris said Wizard introduced the discount to give it an advantage over its competitors in the tough home loans market.

"There's parity between all home lenders -- parity in pricing, parity in fees and parity in applications," he said.

"If you can provide some sort of edge which hits the hip-pocket nerve you should get a better flow of business."

Although Wizard is the first lender in Australia to introduce a fuel discount, its parent company General Electric (GE) has already offered cut-price petrol to consumers through its partnership with retailer Coles Myer Ltd.

Global business GE owns and funds the Coles Myer store cards, which provide holders with an eight cent discount per litre of petrol.

Coles Myer's arch rival Woolworths Ltd also has a similar offer.

Wizard's offer can be used in conjunction with the retail discounts.

Mr Bouris said Australians had not seen the last of high petrol prices.

"One thing is for certain -- the oil price is not at its peak, given the world demand for oil, especially from China," he said.

"If it continues to rise it is going to slow consumption and growth in Australia by a significant level."

The RBA raised interest rates to 5.25 per cent in March this year.

- AAP