Competition in the mortgage market has not been dampened in the face of tougher regulation, says the chief executive of Mortgage Choice, in fact, it is the strongest it has been in several years.
Over the past year, APRA has warned banks to keep growth in their investment portfolios below 10% and required lenders to increase the amount of capital held against residential mortgage lending.
However, the head of Mortgage Choice John Flavell says many lenders are beginning to offer “very competitive” owner occupied home loans in a bid to pick up more of business.
“…just because many of Australia’s lenders are actively trying to reduce their level of investment activity, doesn’t mean to say they are not hungry for business – quite the opposite.
“Australia’s lenders are just as hungry for business as they ever were and because the Australian Prudential Regulation Authority has told them to limit their level of investment lending growth, the lenders have been forced to turn their attention to owner occupiers.”
The raft of incentives being offered on owner occupied lending, which includes rate discounts, cash back offers and fee waivers, means competition is higher than Flavell has ever witnessed.
“In the 20 years I have worked in financial services, I have never seen the level of lender competition we are witnessing now,” he said.
“Regardless of whether people are looking to buy a home or refinance their current property, they can be guaranteed of securing an incredibly competitive home loan deal.”
Two of the most recent lender announcements include Westpac cutting rates, waiving establishment fees and announcing a cash-back offer on one of its owner occupied loan products, while Suncorp trimmed the standard variable rate on one owner occupied product by more than 1%.
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