Banks boost home loan sweetners to lure new customers
The number of bonuses available with new home loans has doubled in the last six months according to analysis by the Mozo Rate Chasers at financial comparison website mozo.com.au.
There are now 20 deals available on the market ranging from cash back offers up to $2000, frequent flyer points and rate discounts.
The RBA has left the cash rate untouched at 2.5 percent since August 2013 and banks are being forced to offer incentives to stimulate switching interest.
Interest rates remain at historical lows with the average standard variable rate now sitting at 5.50%.
Mozo spokesperson Kirsty Lamont said that many lenders aren't really willing to cut their rates further so they are trying to create interest in other upfront offers and sweeteners.
"The influx onto the market signifies the intense home loan competition," she said.
Some of the discounts on offer include:
- loans.com.au - Dream Loan Hot Summer Rate 4.49% p.a. variable
- UBank - $2014 EFTPOS gift card on loan settlement
- Westpac - up to 1% p.a. discount on standard variable rate
- St.George - $1,250 rebate plus 1% discount on loans of $500K or more
While sweeteners are a good tactic for banks and can lead to savings for borrowers Mozo recommends that all home loan customers review their home loan every 18 months - 2 years to make sure they are on the best deal for their situation. It only takes a few minutes to compare with online tools like the Mozo Switch and Save Calculator but it could save you thousands and shave years off your home loan.