Competition in mortgage market 'will ensure low interest home loans'

Tuesday 24 November 2009

Article by Mozo

Competition evident in the mortgage market will ensure low interest home loans are available to consumers.

This opinion was expressed by assistant governor Guy Debelle this week, who pointed out that if the big banks begin to widen their margins by making home loans more expensive, this will create a space for smaller companies to compete.

Currently, ANZ, Commonwealth Bank, National Australia Bank and Westpac dominate the sector, representing 81 per cent of the new owner-occupier mortgages approved in July this year.

"There are good reasons to think that competitive pressures will continue to restrain the ability for any margin-widening on the part of the larger banks," Mr Debelle remarked.

"Any excessive widening in margins will attract new competitors back into the market," he added.

Mr Dubelle said the housing market will nevertheless remain contestable, despite the fact that there are not many competing for custom at present.

A survey has been launched by the Daily Telegraph to ascertain the impact of the increase in interest rates on people who have recently bought a property.

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