Analysis of recent rate discounts has found that “double standards” are rife among Australian lenders who offer better deals to new borrowers.
According to comparison website RateCity, loyal home loan customers are being overlooked in the latest round of interest rate cuts as lenders offer special discounts to new customers only.
RateCity data shows several lenders, including AMP Bank, Beyond Bank, Click Home Loans, IMB, Mortgage House and Suncorp Bank have introduced special offers for new lending only, which cuts their rates by as much as 0.45 percentage points.
“We regularly see exciting new rates come on to the market but when we do a bit of digging, we often discover that they’re for new customers only,” RateCity money editor Sally Tindall said.
“Special introductory offers and new low-rate products are designed as a marketing tool to attract new customers, not retain existing ones.
“It’s not exactly common for a lender to decide to lower an existing customer’s variable rate, except in response to a cut in the cash rate,” she said.
While these rates can often be good deals, Ms Tindall said it’s important to read the fine print, particularly if they’re only for a limited time, as borrowers may find that the rate rises dramatically after the honeymoon period is over.
“These double standards can feel like a slap in the face for loyal customers, but that doesn’t mean you have to just cop it,” she said.
“If you are a long-serving customer, find out what rate your bank is offering new customers, because if it’s different, you’ve just got yourself a bargaining chip."
[Related: Banks ring in new year with rate cuts]