Banks in rate war for owner occupier lending
After the tightening, it is now time for the banks to offer incentives to owner occupiers applying for home loans, but mostly for customers paying principal and interest.
Earlier this week, Westpac announced an eight basis-point cut in variable interest rates for customers paying principal and interest on their owner occupier home loans, taking the standard variable rate for these owner occupiers to 5.24 percent p.a.
Westpac followed a similar move by ANZ earlier this month, when it announced a five basis point cut in variable interest rates for customers paying principal and interest on home loans.
The bank’s standard variable rate for owner-occupiers is at 5.20 percent p.a.
The rate wars prompted comparison website Mozo’s director Kirsty Lamont telling News Corp that “the gloves are off and owner occupier borrowers are the winners”.
It encouraged owner occupiers with principal and interest loans to shop around and take advantage of the competition between banks right now.
For those looking to identify the cheapest home loans, the comparison website has announced the winners of its 2017 Experts Choice Home Loan Awards.
Mozo analysed 504 mortgage products from 89 lenders and awarded the top 10 percent across eight categories designed to reflect different types of borrowers.
The first spot was occupied by loans.com.au whose top product Essentials Variable 80 offers a variable interest rate of 3.64 percent (3.66 percent comparison rate).
Mozo rated the product a winner in multiple categories, including best Split Home Loan and best Variable Rate Loan for both owner-occupiers and investors.
Next was UBank’s UHomeLoan product with a variable rate of 3.74 percent (3.74 percent comparison rate) with no upfront fees.
The third place was reserved by State Custodians Low Rate Home Loan with Offset, a product that offers a 3.69 percent variable interest rate (3.72 percent comparison rate) with the benefit that customers can use an offset account and save on interest.
The others in the list were Bank Australia’s Basic Home Loan, Newcastle Permanent’s Discounted Variable Home Loan, Heritage Bank’s Discount Variable Home Loan Special and Gateway Credit Union’s Variable Rate Home Loan. Their products had interest rates from 3.84% to 3.99%, according to Mozo.
None of the big banks figured in the list.
