One non-bank has said the highly competitive market forced it to cut rates – and that more cuts might be coming.
Homeloans announced yesterday it had cut its Homeloans Ultra Plus package from 4.79 per cent to 4.74 per cent for new business.
The lender’s general manager of sales, Greg Mitchell, said Homeloans needed to respond to cuts by other lenders to remain competitive.
Mr Mitchell told The Adviser that customers were benefiting from what he described as incredibly fierce competition.
“It’s almost like you won’t pay an application fee on a loan. You’ve got some lenders that are giving cash back for refinancing with them,” he said.
“So the ability for a consumer to structure their borrowing with variable or fixed, I think it’s getting close to some of the lowest prices we’ve had for a long time.”
NAB announced two days ago that the bank had cut its two-year fixed rate to the lowest it had been in more than 20 years. A raft of other lenders have also cut rates in 2014.
Mr Mitchell forecast that rival lenders would continue cutting rates this year.
He told The Adviser that Homeloans would keep a close eye on market conditions and might also make further cuts if necessary.
“We continue to introduce different products designed to suit customers’ unique needs. We recently launched the low-rate Homeloans Classic and we are also developing further solutions, including a low-rate, fully-featured loan with 100 per cent offset,” he added.
Note: The Advisor incorrectly reported yesterday that ANZ had increased some of its fixed rates. Those increases applied to New Zealand rather than Australia. The article in question has been corrected.