Trending News 3 June

Which banks are attracting new customers?

The latest APRA monthly banking statistics shows the big banks lost market share to challenger banks and other lenders in the 12 months to April 2019. The value of ANZ’s mortgage fell almost 1 per cent over the past year as borrowers discovered other competitive lenders.

Lenders who enjoyed growing market share over the last 12 months include Arab Bank, Auswide, Bank of Us, Bendigo and Adelaide Bank, HSBC Bank Australia, ING, Bank of Sydney, Macquarie Bank and ME Bank.

In addition to the big four banks, other lenders that have lost market share in the last 12 months include Bank of Queensland, ING, Suncorp, G&C Mutual Bank, Police Bank, QPCU and Teachers Mutual Bank.

Rate cutting war has started already

Australia has a new record low variable headline home loan rate of 3.29 per cent (comparison rate 3.34 per cent) from non-bank lender Mortgage House. And one bank – Greater Bank – has smashed through the 3 per cent home loan rate mark with a one year fixed rate of 2.99 per cent (comparison rate 4.42 per cent).

“Banks and other lenders are already trimming fixed rate home loan rates,” said Vadim Taube, InfoChoice chief executive officer.

Data released by Infochoice last week shows that a borrower on an average $300,000, 25-year home loan could see their monthly repayments fall around $43 per month.

“We expect all four big banks to quickly fall into line with the RBA’s rate movements,” said Vadim Taube.

How much can you save by refinancing?

Many home loan borrowers are currently paying a rate that is significantly higher than the cheapest home loan rates in the market. Currently the big four banks are charging most home loan customers headline interest rates of 4.5 per cent p.a. and above.

Vadim Taube, InfoChoice chief executive officer, said borrowers could organise a big rate cut for themselves, by comparing their own mortgage rate with the best rates now in the market.

“By refinancing to a loan of around 3.5 per cent per annum, a borrower could give themselves the equivalent of four RBA rate cuts of 0.25 percentage points each.”

“And that could equal hundreds of dollars per month, depending on the size of the loan.”

Bank mergers create big new lenders

Two big mutual banks are coming together in one of the biggest banking mergers in Australia in recent years.

Regional Australia Bank and Holiday Coast Credit Union members have voted to create one big institution with $2.2 billion in assets and 85,000 members in northern NSW.

Endeavour Mutual Bank and Sydney Credit Union also plan to merge into one big lender with more than $1.5 billion in assets and around 75,000 members. The new mutual bank may be called “Australian Mutual Bank.”