While all of the big banks have raised fixed rate mortgages in the last few weeks on the back of higher funding costs, a narrow spread of 0.07 per cent remains between the comparison rates on the majors’ fixed rates.
At 6.58 per cent, NAB has the lowest three year fixed rate, fractionally ahead of ANZ’s 6.61 per cent, CBA’s 6.63 per cent and Westpac’s 6.64 per cent.
NAB’s five year fixed rate is also ahead of the other majors.
At 6.68 per cent, it is 0.06 per cent ahead of ANZ and Westpac and 0.07 per cent ahead of CBA.
Finware director Jason Hayden told Mortgage Business that NAB’s bid to ramp up its presence in the home loan sector has been reflected in its pricing.
“NAB is attempting to re-enter the mortgage market and that is why their rate is so competitive. In years gone by, they would often deliver the most expensive rate,” he said.
According to Mr Hayden, a lender’s fixed rate relies on two things: the cost of funding and the amount of business they want to write.
“Sometimes, and for whatever reason, the bank may want to write less business, so they hike their rates,” he said.
Earlier this week, ANZ chief executive Mike Smith indicated that the bank was unlikely to deviate from the Reserve Bank’s rate cycle, though he has since appeared to have changed his stance.
NAB’s chief executive Cameron Clyne said he could not guarantee that NAB would move in sync with the Reserve Bank, but would continue to remain competitive in the market.
“If you’re a NAB customer you are paying $210 a year less than ANZ on the average mortgage. We will always be competitive and we will try and move competitively on interest rates.
Mr Hayden said despite ANZ’s emission that it would move in sync with the Reserve Bank, the spread between the majors would remain fairly tight because it enhances competition in the sector.
“Even if one bank moves on fixed rates and the others do not, the market trend is such that three months down the track all the majors would be fairly evenly matched once more.”
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