Here’s why home loan borrowers could be leaving Big Banks like CBA

By Evlin DuBose · · 3 min read
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Young borrower excited to leave CBA for a smaller home loan lender

Australia’s biggest home loan lenders just got a little bit smaller. 

New data from the Australian Prudential Regulation Authority (APRA) showed last month that CBA lost some of its home loan market share in the last half of 2023. It now accounts for 25.3% of all mortgages in Australia. 

While CBA regained some of its ground in December, it’s slower than other home loan lenders, particularly Macquarie Bank. CBA is at its lowest share of the mortgage market since July 2019. 

Westpac (21.4%) and ANZ (13.5%) seem to have stabilised, while NAB (14.6%) joined CommBank on the downward slide.

So why could home loan borrowers be leaving the Big Four?

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The home loan rate war is over

When the Reserve Bank of Australia first started lifting home loan interest rates in May 2022, mortgage lenders scrambled to poach home buyers eager for a better deal. 

Now that official interest rates have hit a decade high at 4.35% – and will likely stay that way for a while – home loan lenders aren’t so keen to offer lower rates than the competition. The home loan rate war is over. 

However, mortgage stress is still mounting on Australian borrowers. With a huge need to save interest on mortgage repayments, it makes sense why Aussies would turn away from the Big Four Banks. 

After all, if we do a home loan rate check using the Mozo home loan database, the Big Four offer noticeably higher average interest rates than smaller lenders. 

  • Average variable rate: 6.85%
  • Average Big Four variable rate: 7.48%

Averages are for an owner-occupied home loan making principal & interest payments with a loan-to-value ratio (LVR) under 80%). 

No refinancing incentives

In May 2023, CBA became the first Big Bank to withdraw its cashback for refinancing. At the time, 25 lenders in the Mozo home loan database had offers – by August 2023, it was just 13. Today, in January 2024, it’s 7. 

Mozo home loans expert Peter Marshall reminds us that banks are businesses. They won’t offer deals out of the generosity of their hearts, they offer home loan perks to get new customers or steal customers from the competition. 

And with plenty of home buyers keen to enter the market – no matter how steep home loan costs become – there’s not much incentive to compete for refinancers anymore.

That being said, some lenders still offer cashback, including Big Bank ANZ. It’s just about looking further afield. Speaking of which…

Home loan borrowers want something different

Because the Big Four Banks own so much of the home loan market, usually what they say becomes standard. CBA hikes interest rates? So do other mortgage lenders. NAB starts pulling refinance offers? So do other mortgage lenders.

This dominance is a double-edged sword, however. Home loan borrowers must look at smaller lenders, especially online lenders like Unloan (ironically, backed by CBA) or Up (backed by Bendigo), to get something different. 

Something different can look like:

  • Interest rate discounts, like from Unloan, or NICU’s capped rate home loan.
  • Cashback for refinancers.
  • Borrowing and budgeting features in mobile apps.

You can compare some of the best online mortgage lenders in our hub, including picks from Mozo’s expert judges. 

Compare home loans in the table below.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 22 November 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

Promoted

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.28 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Get the security of a competitive fixed rate home loan for 2 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    5.74 % p.a.
    Fixed 3 years
    Comparison rate
    6.81 % p.a.
    Initial monthly repayment
    $2,915

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.18 % p.a.
    Variable
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $3,056

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

Showing 6 of 430 home loans. Use the filters to see more
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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

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