Every cloud, even the ACCC report, they say has a silver lining. The ABA found theirs…. but it sort of missed the point….
The Australian Banking Association welcomes today’s ACCC interim report into residential mortgages, which clearly shows very high levels of discounting in the Australian home loan market. It’s clear that competition is delivering better deals for customers, shopping around works and Australians should continue to do so to get the best discounts on the advertised rate.
The report itself states that “an overwhelming majority of borrowers with variable rate residential mortgages at the Inquiry Banks were paying interest rates significantly lower than the relevant headline rate” (the advertised rate). Discounts on home loans ranged between .78% and 1.39% below the relevant headline interest rate.
The advertised variable discount rate for home buyers today is 4.5%, close to the lowest ever recorded.
Data from APRA(1) and Canstar further illustrates there is strong competition in the home loan market, with over 140 providers, offering over 4,000 home loan products. Truly a vast and competitive market for Australians to choose a home loan.
Other evidence shows that Australians are taking advantage of this competitive market and are shopping around. Research by Galaxy shows that:
- 3 million people had switched banks over the last three years.
- Of those who had switched banks over the last three years, two-thirds (68 per cent) found that switching was an easy process.
