ANZ and CBA have lowered their mortgage rates to boost lending.
Reuters reports that Australia’s big banks have defied market expectations that it will mimic smaller players in hiking mortgage rates as they lower their rates in an attempt to boost lending and regain their market share.
Australia and New Zealand Banking Group cut the variable mortgage rate by 34 basis points to 3.65%, days after Commonwealth Bank of Australia (CBA) lowered some of its fixed mortgage rates by 10 basis points.
Together with Westpac and NAB, the Big 4 control around 80% of the country’s home loan deposit market but have been steadily losing market share to smaller competitors who have been offering cheaper rates.
However, a sharp rise in wholesale funding costs has prompted around 16 other smaller banks to raise home loan rates but even with the increase by smaller rivals, the Big 4’s lending rates remain higher.
Residential property prices in Australia have significantly slowed down after a persistent and heated uptrend from 4.2% in December to a measly 0.2% in April.
This has prompted bank credit growth to fall from a peak of 6.6% in April 2016 to 5.1% in March, according to BMI Research.
Here’s more from Reuters:
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