The big banks lead the way in big advertising and consumer pull, but borrowers should be wary of signing up as there are many lenders who offer a better deal, says a leading comparison site.
Seven lenders have dropped variable interest rates on 20 home loans by up to 0.17 percentage points since the start of January, according to finder.com.au.
The most recent lender to reduce a variable home loan rate out of cycle is Yellow Brick Road, which dropped its Rate Smasher home loan by 0.05 percentage points to 4.68%.
Others include ANZ
, Bank of Queensland
, Homeloans, HSBC
While competition is heating up between lenders, the big four still increased their market share.
Australian Prudential Regulation Authority data shows the big four's combined market share has increased three percentage points over the year to February to 84%.
But borrowers should “read between the lines” and be wary of discounted home loan rates widely advertised, finder.com.au spokesperson Michelle Hutchison said.
There are 65 variable home loans in their database that are lower than the big four banks' average discounted rate for a loan of $400,000, she said.
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