Official data shows a significant rise in loans written by Macquarie as competition in the market remains elevated, forcing lenders to lower interest rates.
The country’s largest banks are quietly offering their back book a 1 percentage point discount to prevent existing customers from switching lenders amid a surge in competition and as $350 billion in mortgages roll off ultra-low fixed rates this year.
The ANZ and Commonwealth Bank reported owner-occupier loan growth of 1.89 per cent and 1.87 per cent respectively over the quarter, well above their rivals, although National Australia Bank had the largest increase over 12 months, up 10 per cent. The growing willingness of the big lenders to extend the discounts being offered to new customers to their back book is based on the additional cost borne by borrowers who do not change their lenders in response to better offers.Mr Grocke said when brokers have approached a major bank seeking a discount for an existing customer, the average reduction is around 0.65 percentage points, an average $3500 annual saving on a $500,000 mortgage.
Macquarie, which is now writing about 5 per cent of all home loans in Australia due to its fast approval times“We have seen a significant uplift in new loans written with Macquarie versus other lenders in terms of the percentage share of broker loan books,” he said.Sherlok data also shows the average length of a home loan is now 37 months – just over three years – with mortgages at ANZ some nine months shorter than those at the Commonwealth Bank.
Mortgage brokers reacted coldly to APRA’s decision, announced on Monday, that it would maintain the current serviceability buffer applied by banks to assess borrower’s capacity to repay a loan at a higher rate.“More borrowers are becoming ‘mortgage prisoners’, locked into a situation where they can’t access a better deal because they don’t meet the inflated assessment rate,” said Finance Brokers Association managing director Peter White.
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