Rate rises give banks a leg-up over non-bank challengers | clancyyeates
Non-bank lenders seeking to disrupt the $2 trillion mortgage market face a tougher grind in competing with established banks as interest rates rise and the banks tap cheap deposit funding and lure borrowers with cash-backs and lucrative discounts.
Digital lender Athena Home Loans raised its rate for new and existing customers by 0.65 percentage points in July, and Nano Digital Home Loans raised its rate by the same amount last month, RateCity said. Non-banks say the funding disadvantage they have will be temporary, arguing banks will ultimately face higher funding costs too.
“Over the medium term we expect rate increases to be relatively neutral, because the same forces that drive up our wholesale funding costs also drive up bank funding costs and deposits costs. But in the short term, they are at an advantage,” he said.
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.
Spain plans ‘digital nomad’ visa scheme to attract remote workersScheme includes tax breaks and gives Britons and other non-EU citizens chance to stay up to five years
Read more »
Surging rates mask hidden pain for banksWhen interest rates go up, banks normally make more money. But what happens when they go very high, very quickly?
Read more »
Markets have many traits that led to the ’87 crashInvestors are in a world of pain as central banks curtail their experiment with ultra-low interest rates, while analysts point to the parallels with the 1987 market collapse.
Read more »
Cash rate rises don’t seem to have ‘appreciably slowed’ economic activity: YetsengaANZ Chief Economist Richard Yetsenga says the Reserve Bank of Australia will likely increase interest rates by 50 basis points in October. “I think we’ll see a continuation of the run of 50 basis point moves,” he told Sky News Business Reporter Ed Boyd. Mr Yetsenga said some survey indicators suggest the economy has managed to run well, despite the rate rises. “In fact, almost anything outside the housing sector is saying the rate hikes we’ve seen to date don’t seem to have appreciably slowed activity and so are unlikely to have affected businesses’ willingness to pass cost increases through.”
Read more »