As the RBA prepares to raise interest rates for the fifth straight month, the big banks slow their mortgage growth but discount rates for new customers.
Major banks remain locked in a tense battle for new borrowers as mortgage growth slows, with the Commonwealth Bank reducing variable home loan rates for some new customers late last week even though the Reserve Bank of Australia is expected to continue with official rate hikes this week.
This forced CBA, the nation’s largest lender, to cut the standard variable interest rate offered to new customers with at least 30 per cent equity in their home by 0.1 per cent on Friday. It is the second time CBA has reduced interest rates for high quality, new customers since the RBA rate hiking cycle began.
Nevertheless, analysts are tempering expectations for mortgage growth over the coming months, which has helped to push bank stocks lower over the past month. The Reserve Bank is expected to increase the cash rate by another half a percentage point on Tuesday.Data from both the Australian Prudential Regulatory Authority and Australian Bureau of Statistics last week revealed that major bank housing lending had hit the skids.
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