Banks set to follow CBA mortgage rate cuts to regain marketshare

Banks set to follow CBA mortgage rate cuts to regain marketshare
Banks set to follow CBA mortgage rate cuts to regain marketshare

Australia's major lenders are set to join the trend towards cutting their interest-only mortgage rates.

Australia's big four have been losing market share to smaller lenders since they needed to meet APRA's 30 percent cap on interest-only loans.

Commonwealth Bank, Australia's largest mortgage lender, has already cut a range of fixed rate interest-only home loans by up to 50 basis points.

The loans range from one to four years.

Matt Comyn, the incoming Commonwealth Bank CEO, recently highlighted plans to rebuild interest-only market share after over-shooting the regulatory 30 per cent target and ending in the low 20s.

Canstar's group executive for financial services Steve Mickenbecker told the Australian Financial Review to "expect others to follow."

Montgomery Investment Management portfolio manager Stuart Jackson told the AFR non-bank financial institution (NBFI) lending appears to have taken up the slack of property buyer demand.

"This is not great news because either the macro-prudential restrictions put (the banks) at a competitive disadvantage to the NBFIs, resulting in ongoing reductions in market share, or the risks to the financial system that the macro-prudential regulations are intended to fix are not addressed due to the shift in lending demand to the NBFIs," Mr Jackson said.

Westpac have selectively began cutting rates while ANZ are also expected to follow.

ING, Macquarie Bank and Virgin Money have reduced rates on their interest-only products, while Bankwest, Homeloans.com and BlueBay Home Loans also recently cut rates.

 

 

 

 

Tags: 
Home Loans Mortgage Rates

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