Banks are desperate to attract new mortgage customers and some of the big banks are slashing their rates and lenders’ mortgage insurance costs, fuelling a lending war. According to RateCity records, the average cut to rates in the last week has been 25 basis points.
11 lenders have slashed their rates for both owner occupied and investment properties and two lenders have discounted lenders’ mortgage insurance costs in the hope of attracting first home buyers.
The official cash rate is expected to be cut by the Reserve Bank in either October or November, but the rest of the banking industry is expected to begin slashing rates before then in order to remain competitive.
While rates are at record lows, a large volume of existing mortgage customers are taking advantage and refinancing their home loans. Some lenders are even offering cash back offers to attract new customers.