Headline rates a ‘baiting and switching’ tactic, says broker

“I just find it to be suspect that they’re using tactics that are going to affect the consumer in baiting and switching,” Mr Uehling said.

Mr Uehling’s comments come after a number of lenders have announced variable rates as low as 3.99 per cent in recent weeks.

“It’s using marketing as a negative tool, in my opinion. I think they should just come clean and instead of throwing out low rates like that to just turn around and change them, that’s just going to [tick] people off and it’s going to affect their brand.”

Meanwhile, Simplify Your Mortgage managing director Nathan Daniell said rates like these can be misleading if lenders have them on special for a limited time.

“Limited time specials are obviously there to attract new business but if the lender in the past has traditionally had a higher interest rate than others then it’s not something that I would look at doing for my clients,” he added.

However, Hank Hong of Home Loan Experts said the rates currently offered by some of the smaller lenders present a good opportunity to brokers.

“With these low rates, they do require P&I and maximum 80 per cent lend so it is a good time to scoop up excellent clients at a safe LVR,” Mr Hong said.

“Also these lenders have paired it with some excellent fixed rates which mean they are clients for the next few years.”

Mr Hong said he believes the rates are a true reflection of what his clients expect to pay.

“I believe so as the annual fees are quite low or there are none at all. There are no hidden costs which are ‘out of the world’ with these rates,” he said.

“I think it’s a fantastic time to review your mortgage as there are some amazing deals out there.”

[Related: ING Direct lifts variable rates]