Australian Banks Compete Harder for Home Loans — Why Borrowers Should Review Their Mortgage

Competition for Australian mortgage customers is intensifying, potentially creating an opportunity for homeowners to reassess whether their existing home loan remains competitive.

Reuters reported this week that Australia’s major banks have experienced double-digit falls in home-loan applications. Westpac reported a 20% fall, Commonwealth Bank and NAB reported declines of around 15%, while ANZ reported a 12% reduction.

For the banks, declining mortgage volumes present a challenge. For borrowers, however, there is a potentially positive side: lenders have greater incentive to compete for customers.

Reuters reports that Australia’s four major banks control more than 70% of the country’s approximately $2.5 trillion mortgage market and that softer home-loan demand is expected to intensify competition.

That makes this a particularly relevant time for homeowners to review their mortgage rather than automatically assuming their existing lender remains competitive.

A home-loan review can look beyond the headline interest rate. Fees, offset accounts, redraw facilities, loan structure, fixed versus variable options and refinancing costs can all affect whether changing lenders actually produces a worthwhile benefit.

Borrowers should also avoid assuming that refinancing automatically means savings. The remaining loan term, switching costs and individual financial circumstances need to be considered before making a decision.

The broader message is encouraging: when lenders are competing harder for borrowers, consumers have more reason to compare their options.

For Perth homeowners who have held the same mortgage for several years, it may therefore be worth checking whether the rate and features they currently have remain competitive.

Naga Mortgage Brokers can help compare suitable lending options and assess whether your existing mortgage still suits your circumstances.

General information only. Lending criteria, fees, charges and individual circumstances apply.