More choice likely among big four bank mortgage rates: Mortgage Choice CEO Michael Russell

The current 15-basis-point gap between the standard variable interest rate of the major banks will widen in the future, according to Mortgage Choice CEO Michael Russell.

NAB currently has the lowest variable rate of the 7.31% with Westpac the highest at 7.46%.

Russell says the latest round of major bank interest rate increases shows that the major banks are now prepared to move interest rates out of cycle with the RBA and has also signalled to existing and prospective borrowers, that the major banks no longer adopt the same pricing movements.

“While major banks’ standard variable rates have, up until a couple of years ago, been on par each other, borrowers now need to be aware that their standard variable rates are likely to differ going forward,” he tells Property Observer.

“The difference between the standard variable rates for the  big four banks was a significant 14 basis points prior to the latest round of increases and now sits at 15 basis points,” he says.

While Mortgage Choice does not track this data, Russell says the major banks have kept their interest rates on par until the out-of-cycle rate moves by the majors in November 2010.

In November 2010, the Commonwealth Bank announced a 45-point hike after the RBA's Melbourne Cup Day 25-point increase.

Furthermore, he says using a professional mortgage broker has just become even more imperative for existing and prospective borrowers, “to help ensure they obtain the most suitable loan product for their individual needs and requirements”.

{module What do you intend to do given the current interest rate fluctuations?}

{module Have you changed lenders in the last six years?}