Borrowers in hot seat as banks battle for business
Australia's home buyers and investors are set to be the big winners as the big banks heat up their marketing efforts in a bid to grow their market share.
Over the past 12 months, Westpac has lost 1 percent market share reports The Australian. Westpac currently has 22 percent of the housing market, CBA has 28 percent with ANZ and NAB trailing but gaining ground.
Westpac Chief Executive Gail Kelly said at the bank's first-half result last Friday that she wanted to see mortgage growth pick up across the group's portfolio of brands which include Westpac, Rams, Bank of Melbourne and St.George.
Nomura analysts Victor German told The Australian that he expects CBA and Westpac to ultimately use price to arrest market share losses.
Westpac better get a move on. NAB currently has a $1000 cash back offer for homeowners who switch loans and apply before 30 September. Macquarie Group has also made known its intentions to grow its mortgage business through its partnership with Yellow Brick Road.
The Reserve Bank board decided to leave rates on hold at 2.50% at its meeting on Tuesday, but didn't rule out the possibility of further cuts. With home loans rates are currently at historic lows, borrowers and those looking to refinance have plenty of options. On a $300,000 mortgage (80% LVR), Mozo research shows that switching from a big bank with a package rate of 5.08% (+$300 annual package fee) compared to the lowest rate in the market, 4.55% from loans.com.au, borrowers could save $1,140 a year by switching.
To compare home loans, borrowers can review rates from all lenders on comparison site Mozo.