Mortgage war intensifies as banks lower variable rates to attract customers
Competition among Australia’s major banks is intensifying as lenders cut home loan rates to attract customers, despite growing expectations that the Reserve Bank could raise interest rates again.
Commonwealth Bank reduced rates across several mortgage products in late June. ANZ and Westpac followed, while Macquarie Bank also cut rates in July.
Mortgage broker Julian Choo said dozens of lenders had lowered variable rates, creating opportunities for new borrowers and refinancers.
However, he warned that existing customers may not automatically receive the same deals. Banks often offer their most competitive rates to attract new customers rather than rewarding long-term borrowers.
Property investor Kevin Wong recently negotiated a lower rate, moving from a 7.29% principal-and-interest loan to a 6.79% interest-only loan. He also increased his $750,000 mortgage to $920,000 to fund renovations.
While the lower rate reduced his immediate repayments, an interest-only loan could cost more over the longer term.
The major banks remain dominant in Australia’s mortgage market, with Commonwealth Bank leading, followed by Westpac, NAB and ANZ. Macquarie is rapidly gaining ground.
MST Financial banking analyst Brian Johnson said lenders were competing for a larger share of a slowing mortgage market.
Finder data shows some of the most competitive variable mortgage rates are now around 5.69%, while leading fixed rates range between 5.8% and 6%, depending on the loan term.
With another Reserve Bank rate hike possible later this month or in November, borrowers are being urged to closely monitor their mortgage rates and negotiate where possible.
Analysts say banks can recover some of the cost of lower loan rates through deposits, fees and other products. Finder spokesperson Taylor Blackburn said lenders were increasingly assessing customers individually as competition grows.
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Source : ABC News
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