Banks and credit unions will do battle to attract potential home
loan customers over the next few
months.
Australia's banks are gearing up to
woo potential buyers with cut-price home loans in an effort to breathe
new life into the sluggish housing market, despite the prospect of
further interest rate increases.
With the
government's ban on home loan exit fees due to come into effect
from July 1st, competition between lenders is poised to intensify and a
number of discount deals have been unleashed as part of their attempt to
attract customers.
According to the Savings
Blog, credit unions are also getting in on the action, with
Credit Union Australia unveiling a three-year fixed rate at 7.14 per
cent. Aussie Home Loans, meanwhile, has slashed its variable rates to
6.99 per cent per annum for new
clients.
"From a choice point of view, if
you look at the choice consumers have, whether they can get a better
deal ... there's definitely more choice out there now than there
was at least two years ago," InfoChoice spokesman Dirk Hofman
told the Australian.
Mr Hofman added that
competition is likely to intensify over the next few years as firms do
battle to undercut one another and more companies return to the housing
market, boosted by the freer availability of financial
support.
Nathan McMullen, head of product
development at Westpac, predicted that major banks would gradually begin
to assert themselves as the big players in the sector and noted that
demand for fixed-rate mortgages had declined
recently.
He claimed that "between five
and seven [per cent]" of Westpac's lending was in the
form of fixed-rate arrangements and suggested that lenders looking to
make a splash in the market should concentrate on their variable rate
offerings.
Last week, the Sydney Morning Herald
reported that National Australia Bank's (NAB's) online
subsidiary Ubank had revealed plans to provide standard variable rate
home loans of more than 0.5 per cent below NAB's own equivalent.
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