Better Deals for Borrowers
Monday, 8 February 2010
The Reserve Bank surprised financial markets and delighted mortgage holders with its decision to leave official interest rates unchanged for February. There is now more positive news for borrowers, with the likelihood of greater competition amongst lenders during the year to come.
Last year the big four banks massively increased their market share, writing 95% of all new residential mortgages in December. They also managed to take control of some of their fiercest competitors, with mortgage originators such as Aussie Home Loans, RAMS and Wizard now either wholly or partly owned by the major banks.
A wave of new lenders is however now emerging, including Hemisphere, New Loan and Opportune Home Loans. The new entrants all plan to undercut the big four and seize some of their huge market share. The more competitive environment should see the banks reign in their margins and will likely result in better deals for borrowers.
