Mark Bouris says look for the 1 percent difference in available mortgage rates

Mark Bouris says look for the 1 percent difference in available mortgage rates
Mark Bouris says look for the 1 percent difference in available mortgage rates

Mark Bouris, executive chairman of Yellow Brick Road, says borrowers need to vote with their feet.

"Quite simply, if the banks ratchet up rates and costs, go elsewhere and borrow from another lender," he wrote in his weekly Fairfax column.

He noted the property federal budget bank levy goes back to 2008, when a financial crisis was building and the four major trading banks – plus Macquarie Bank – wanted assistance from the federal government to stabilise our financial system.

"The government – actually, the taxpayer – guaranteed Australian deposits at deposit-taking institutions, up to $250,000.

"The banks also got a governmentguarantee over some bank debt and an ongoing facility up to $180 billion, which gave the banks access to very cheap debt.

"This new levy is 0.06 per cent of this government-guaranteed facility – it’s a very low charge for allowing banks to reduce their overseas borrowing costs and therefore, make bigger profits.

"So why would the bank charge you for giving it access to the cheapest capital?," he asked adding we’ll see what the banks decide to do – absorb the levy or pass it on.

He told borrowers there are only five banks being taxed with the levy.

"But have a look at a comparison website and you’ll see many lenders out there, from credit unions and building societies to small and regional banks, as well as loans offered by mortgage brokers and other financial services players.

"On any week, there can be a 1 per cent difference in interest rate between the lowest cost and most expensive standard variable mortgages.

"Why pay more than you should?"

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