One of Australia's biggest banks, National Australia Bank, says competition for fixed rate home loans will intensify.
NAB’s head of mortgage lending, Steven Shaw believes that all four major Australian banks will create a price war as they compete for business.
This is despite the same banks raising rates for fixed home loans earlier this month.
“In the lead-up to the new financial year we’ll probably see more banks become competitive in the fixed-rate market,” he said.
Mr Shaw said it's likely there will be a shrinking gab between variable rates and longer term fixed rates, but cannot say by how much.
NAB has the most competitive fixed home loans with one, two, three and five years , whilst Westpac heads the pack with seven and ten year loans, says market research firm Cannex who conducted the research.
Earlier this month, the Reserve Bank cut 25 basis points off the official cash rate. Most banks passed on 10 basis points to home owners, but NAB did not cut variable rates at all.
Then a week later, several banks raised fixed rates by around 20 - 45 basis points.
NAB's more aggressive approach to pricing may attract property investors who often pre-pay the interest on their loans in order to get tax benefits.
Join the discussion on Fixed Interest Rate Home Loans
|