‘No frills’ home loans new bank battleground | clancyyeates
As interest rates climb, major banks are attempting to lure new customers with “no-frills” home loans that lack key features but have lower interest rates.interest rates on their basic mortgages. However, the lower rates are only available to new customers – not existing borrowers – but are nonetheless a sign of increasing competition in the key mortgage market.Louise Kennerley
Typically, these “no frills” home loans do not charge establishment or annual fees, and they also do not include a package deal of credit cards that banks tend to offer with other mortgages.Perhaps the most important difference between the banks’ “no frills” loans and other mortgages is whether they have a mortgage offset account – a type of deposit account linked directly to a loan.
He says it can make sense to have a “no-frills” product for an investment loan. That is because interest paid on those loans is tax-deductible, meaning investors prefer to offset their funds against their home loan instead.Whether an offset is worth it in an individual case depends on other details, such as the rates on offer and how much you have in savings.
So far, “no-frills” loans are only a minimal part of the mortgage market, and Citi’s Sproules thinks that will remain the case. Even so, the recent moves by banks cutting certain rates underlines that the cheapest offers inevitably go to new customers, or those prepared to negotiate for a better interest-rate deal.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Banks unlikely to sting mortgage holders with higher rates than RBABank profit margins are already benefiting from rising interest rates, while returns on most retail term deposits languish well below those offered to bigger investors.
Read more »
Banks unlikely to sting mortgage holders with higher rates than RBABank profit margins are already benefiting from rising interest rates, while returns on most retail term deposits languish well below those offered to bigger investors.
Read more »
Banks unlikely to sting mortgage holders with higher rates than RBABank profit margins are already benefiting from rising interest rates, while returns on most retail term deposits languish well below those offered to bigger investors.
Read more »
Cashed-up farmers ready to grow, still paying down debtNew data from the Australian Banking Association shows new lending was up 29 per cent in the 12 months to February 2022, as farmers prepare for bumper season.
Read more »
NAB in $1b hybrid deal, big syndicate hired to sellNational Australia Bank has tapped a big retail broker syndicate to raise $1 billion or more for a new hybrid issue.
Read more »
Aussie golfer ‘speechless’ as US Open win secures record payday.minjeegolf has joined Australia's all-time golf greats as a multiple major champion with a runaway victory at the mega-rich uswomensopen in North Carolina. 7NEWS
Read more »