Banks ring in new year with rate cuts

A number of Australia’s non-major lenders have started 2016 by announcing significant pricing and policy changes.

Suncorp Bank kicked off the round of rate cuts last week by announcing a huge 1.55 per cent standard variable rate discount for investors and owner-occupiers taking out new lending of at least $150,000 on the group’s Home Package Plus mortgages.

The bank also cut its three-year fixed rate by 35 basis points.

Suncorp Bank's head of intermediaries, Steve Degetto, said the new offers give customers the flexibility to select a competitive rate that suits their individual circumstances.

“The Suncorp Bank Home Package Plus product provides customers with flexibility and a wide range of benefits by combining their home loan with other banking products,” Mr Degetto said.

“The new discounted rates only strengthen the value of this award-winning product, and provide brokers with a competitive proposition to deliver to their customers.

“We’re also waiving the Home Package Plus annual package fee for the first year (normally $375) for new Home Package Plus customers taking out new lending of at least $150,000.”

Mr Degetto said Suncorp have decided to start 2016 with a new mindset.

“We have listened to broker feedback and made progressive changes to improve our processes and simplify some policies,” he said.

“This improved service, combined with our new competitive offers, will support our broker partners to hit the ground running in 2016.”

AMP Bank also announced a reduction to a number of its variable and fixed-rate loans, with the discounted rates becoming effective today.

The lender said its AMP Essential variable rate loan will be reduced by 30 basis points to 4.08 per cent per annum (comparison rate 4.10 per cent per annum).

The basic three-year fixed rate will drop by 27 basis points to 4.28 per cent per annum (comparison rate 4.32 per cent per annum).

The variable rate on new investor property loans for the basic loan will reduce by 40 basis points to 4.57 per cent per annum (comparison rate 4.61 per cent per annum).

The basic three-year fixed rate for new investor property loans is reducing by 45 basis points to 4.57 per cent per annum (comparison rate 4.61 per cent per annum).

Meanwhile, ING Direct announced that owner-occupied customers of its Orange Advantage mortgage with an LVR of 80 per cent or less will see a 6-basis-point discount on loans of $150,000 or more.

The bank further revealed that new owner-occupied Orange Advantage loans with an LVR of 80 per cent or less will not be subject to the 18-basis-point rate hike announced late last year.

Finally, Queensland-based lender Heritage Bank has increased its LVR from 80 per cent to 90 per cent on investor loans.

In a statement the group said the policy change comes as it looks to maintain its competitive position in the mortgage market.

Industry professionals are confident that the challenger banks will grow their share of the mortgage market this year. In a recent Mortgage Business poll, 64 per cent of readers said this would be the case.

Recent figures from AFG highlight that the non-majors have already gained significant ground.

The latest AFG Competition Index for the last quarter of 2015 found that the non-majors increased their share of all broker-originated home loans from 26.8 per cent in October to 30.3 per cent in November.

Refinancing deals were a big win for the challenger banks, who grew their share of the market segment from 32.9 per cent in October to 39.5 per cent in November.

[Related: Non-major slashes mortgage rates]

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