Home loan market 'getting competitive again'
A range of smaller banks are now offering competitive home loans alongside the bigger lenders, a mortgage advisor has said.
Michael Russell, chief executive of Mortgage Choice, told the Sydney Morning Herald that second-tier banks such as St George, Bankwest, Suncorp, ING Direct and AMP Banking were now getting a bigger share of Mortgage Choice settlements. He added that Liberty Financial, which is now offering near-prime home loans, was among the new lenders to be added to its panel this year.
"With the tightening of lending criteria, some banks won’t lend to people who have a credit file entry for a late power or telco bill payment," he told the news provider. "Liberty is calling those borrowers near-prime."
The motivation for bank customers to compare home loans has also been fuelled by speculation over continuing interest rate rises next year. With the official cash rate up to 3.75 per cent last week, the Sydney Morning Herald quoted a forecast by Citigroup that has suggested the Reserve Bank of Australia’s official cash rate will be 4.25 per cent by the end of the March quarter next year, with other bank rates rising accordingly.
Data recorded by the Australian Bureau of Statistics for October found that mortgage demand had eased slightly, the Daily Telegraph reports.
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