RBA Governor Philip Lowe says shop around for a better home loan

The Reserve Bank of Australia Governor Philip Lowe has urged households to shop around for a better home loan deal.

It was during a speech where Australia’s top central banker played down recent increases in mortgage rates by domestic lenders but highlighted global risks.

"A much less remarked upon fact is that the average mortgage rate paid in Australia has fallen since August last year, as lenders have increased their discounts," the governor said.

"I encourage anyone with a mortgage to shop around: there are some very good offerings out there.

"We can all play a role in promoting strong competition in our financial sector by shopping around and taking advantage of the good deals that are out there."

Lowe said the board was closely monitoring housing markets across the country and trends in housing finance.

"Housing credit growth has slowed, which, from a medium-term perspective, is a positive development.

"Our assessment is that this slowing largely reflects reduced demand for credit by investors, although there has been some tightening in the supply of credit as well. With housing prices falling in a number of cities, largely due to a shift in the underlying fundamentals, investors no longer find it as attractive to invest in residential property as they once did.

"This is a normal part of the cycle.

"While credit standards have been tightened, mortgage credit remains readily available."