Bank Move Stems Flow
The Age
Tuesday June 18, 1996
THE RECENT fall in home loan rates by the major banks is likely to slow the flow of new business to the mortgage managers and force many to review their rates to attract borrowers.
With many of the mortgage originators already operating on slim margins, any rate reduction to widen the gap between them and the banks is likely to be small, but according to some in the industry it is almost inevitable if they are to continue to claw away at the stanglehold the banks still maintain.
The gap between the banks and the mortgage originators has been reduced to less than 1 per cent and many borrowers will have to assess the value of the saving of going to a mortgage originator compared with the convenience and service offered by the banks.
Much of the new business being generated by the mortgage originators has come from borrowers refinancing their existing loans.
Before the recent round of rate cuts many banking commentators had made the point that without the competition from mortgage originators, the variable rate offered by the banks would probably have been around 11.5 per cent.
© 1996 The Age
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