In an attempt to attract new business, Australian banks are offering new customers competitive rates on home loan packages, but existing customers are not receiving the same treatment.
An RBA released report following the October cash rate cut of 0.25% found that Australian banks cut their standard variable rates for existing clients by an average of 0.19%. In contrast, home loan packages offered to new customers were cut by an average of 0.29%, revealing that deals for new clients are exceeding the cuts made to the RBA’s official cash rate.
Smartline Mortgage Advisers executive director Joe Sirianni revealed that this has come after a significant drop in the number of Australians seeking home loans.
“The competition has heated up for the banks and they are all trying to grow market share while vying for a smaller pool of business. As a result, they’re prepared to ‘sharpen their pencil’ and offer an extremely competitive rate to secure a new customer,” he said.
Need help getting started? Get expert advice here
Sirianni added that the discrepancy between rates for new and existing customers leaves existing customers two options for receiving the best offers possible from Australian banks. The first is to look into becoming a new customer with another lender. The second is to familiarise yourself with the deals being offered to new customers by your current lender and demand the same.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out