Home loan competition ‘heating up’

Home LoansBanks and credit unions will be battling the competition to win over potential home loan customers in the coming months.

Australian banks are preparing to woo home buyers with discount home loans in an effort to stimulate the housing market, despite talk of more interest rate hikes.

With the ban on home loan exit fees coming into effect on 1 July, industry competition is expected to intensify, with a number of cut-price deals being launched in an attempt to attract customers.

Credit unions have also moved in to get a piece of the action, with Credit Union Australia unveiling a 3 year fixed rate home loan at 7.14%. Meanwhile, Aussie Home Loans has cut its variable rates to 6.99% for new clients.

InfoChoice spokesman Dirk Hofman told the Australian: “From a choice point of view, if you look at the choice consumers have, whether they can get a better deal … there’s definitely more choice out there now than there was at least two years ago.”

Mr Hofman said that competition will heat up over the next few years as firms push each other to new standards while more companies are expected to return to the housing market which will be boosted by the freer availability of financial support.

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