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Mortgage rates have opened up as smaller lenders undercut the majors giving brokers better options for their clients.
A number of lenders outside the big four now offer better interest rates than the majors, a new RateCity report has found.
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According to the report, the majority of smaller lenders managed to stay in touch with the Reserve Bank and raise variable mortgage home loan rates by just 25 basis points.
In the first week of December, 19 lenders increased rates on 179 home loan products.
Of the 19 lenders, 14 were credit unions and five were banks.
Laiki Bank moved its rates by the greatest amount, lifting two of its fixed rates products by 0.70 per cent, while the Australian Defence Credit Union and University Credit Society raised nine home loans by 0.50 per cent.
RateCity chief executive officer Damian Smith said borrowers should look around for bargains.
“Lenders outside the big four are offering significantly better rates, and as rates rise, the cost of getting the wrong deal increases also,” he said.
“Some lenders appear to be biding their time for the spotlight to fade before lifting their rates.”
According to Mr Smith, the spread between the different lending institutions will be narrowed in January when more lenders feel free to lift rates.
