Mortgage wars? Major banks scramble to win customers

Mortgage rates are generally on a downward trend.
photo: Royal Bank of New Zealand

The mortgage wars appear to be intensifying, with major banks competing fiercely to win customers’ funds.

ANZ cuts interest rates This week, the bank cut its floating mortgage rates again, and notably, it also cut its floating mortgage rates by 15 basis points – the first bank to do so in recent times.

It follows Mortgage lending is generally on a downward trend Interest rates in India have also fallen in recent weeks in anticipation of a cut in the official cash rate by the central bank, with wholesale rates falling in response.

Mikey Smith, a mortgage adviser at Guardian Smith, said banks had been targeting borrowers approaching renewal and he was seeing more wiggle room in the negotiation process.

“It’s been really dramatic, and I feel like every day I’m updating people, giving them new rates – I think more so for people with existing mortgages, and I think that’s what’s driving it.

“Over the last few years, interest rates have been high relative to the last decade, and everybody is price sensitive right now, and everybody is looking for options that can bring them some relief.”

Smith said banks know borrowers are shopping around and are willing to negotiate with advisers.

He said banks were also offering better cash back policies to win over customers.

“There’s definitely some competition here,” Smith said.

As for new home sales, Smith doesn’t expect a big pickup in activity if interest rates suddenly drop.

“People are focusing on things like job security, and during this pandemic, that hasn’t been an issue.”