The Finance Brokers Association of Australia
has expressed disappointment over the big banks’ seeming lack of interest in trying to work with borrowers by raising their home loan rates instead of dropping them.
It singled out ANZ among these banks. ANZ announced earlier this month (19 January) that it was increasing its rates for one to five year fixed loans and fixed owner occupier and investment loans by up to 20 basis points.
FBAA welcomed the move by smaller lenders to cut down their housing loan rates.
“It is good to see the non-banks, second tier and small lenders supporting home borrowers,” said FBAA executive director Peter White.
The past few weeks have seen a number of non-major lenders slashing their housing loan rates to attract owner-occupier and investment borrowers.
Last week, MyState Bank cut its owner-occupied three-year fixed home loan rate by 75 basis points for loans with more than 80% to 90% LVR and dropped its three-year residential investor rate by 60 basis points for loans with LVR equal to or less than 80%.
Auswide has also started offering owner-occupiers a discounted variable rate of 3.59% p.a. on new P&I loans of $100,000 or more with a LVR of up to or equal to 90%, as well as a discounted three-year fixed rate of 3.99%. It has also cut its investment P&I loan rate for borrowers with an LVR of up to or equal to 90% by 221 basis points.
The FBAA said it would benefit borrowers if the big banks followed suit.
White expressed hope the big five banks will realise that using their size to take advantage of the market is not helping anyone.
“We hope in 2018 the big banks remember where their profits come from, and that is borrowers,” he said.
Responding to this statement, a Westpac spokesperson pointed out that the bank recently launched a variable rate for owner occupied (P&I) loans that is Westpac’s lowest rate since 1956.
The bank launched its Flexi First Option Home Loan with a variable rate of 3.59% in early December.
“We know many Australians begin thinking about purchasing new homes around the December and January period, which is why we’re pleased to offer a range of competitive rates for new lending customers at this time,” said the spokesperson.
Canstar's latest data for 23 to 29 January 2018 shows that rates for three year fixed residential P&I loans and investment P&I loans
recorded an average decrease of 0.21% and 0.43%, respectively.
For IO products, rates of basic variable investment home loans had an average decrease of 0.40%, while three year fixed investment loans went down by 0.43% (average).
Non-major joins rate-slashing fray
Non-major cuts rates for several loans