Home buyers and investors are the big winners as the major banks offer larger interest rates discounts on mortgages in a bid to win customers as the property market heats up.
Amid intense competition in the home loan market, mortgage discount of at least 0.85 percentage points have become common place, while some borrowers are having more than 1 per cent point lopped off their interest rates, new research shows.
The larger discounts are good news for home buyers and investors in the market, with 3 year fixed rates as low as 4.49%! Speak to a Discovery Finance Expert today to review your rates.
Extremely competitive year ahead
According to data compiled by AFG, ANZ Banking Group is offering those that want to borrow more than $500,000 a discount of 0.85 of a percentage point off their standard variable rate, while Commonwealth Bank of Australia is reducing its rates by the same amount for customers that borrow between $500,000 and $750,000.
Westpac Banking Corp. is discounting its variable rates by 0.90 percentage point for customers that borrow between $250,000 and $750,000 by April 30 and National Australia Bank’s Homeside group is offering a 0.94 percentage point discount for loans between $500,000 and $750,000.
Macquarie Bank, which is making a bigger push into home loans, is offering a discount of 1.01 percentage points for loans between $500,000 and $750,000.
RBA: Low rates a boost to the market
Official Reserve Bank of Australia statistics show the average mortgage discount for loans above $250,000 was 0.83 of a percentage point at the end of January, up from 0.75 of a percentage point a year ago. In the minutes from its latest monetary policy meeting, released on Tuesday, the RBA said low interest rates were providing a boost to the property market. The RBA kept official interest rates at a record low 2.5 per cent at the February 4 meeting, a factor that has helped house prices rise by 9.3 per cent over the past year.
“The effects of low interest rates were clearly evident in the housing market,” the RBA said on Tuesday.
Amid intense competition for customers, lenders are pulling out all steps to lure borrowers. Some lenders will make it known to brokers that if they need to match a price to beat a certain competitor, then to give them a call and see what can be done.
Time to review your lending? Paying too much to your bank? Speak to an expert at Discovery Finance Group on 1300 88 73 28 or email us.