Thought it worth sharing a very interesting statistic out of one of the articles in todays Financial Reveiw, especially as so much has been written and indeed posted regarding bank finance as opposed to mortgage originators/nonbanks/broker labelled loans…..of the so called 'major banks' the one which offers the most competitive variable rate interest loan product, (OK, the cheapest was what they called it) according to CANNEX as of June this year, out of the top 100 rated loans, their best loan came in at position……..wait for it…… 94 !!! In other words, the 93 cheaper loans as rated by Cannex are all from 'non banks'.
No doubt the banks will close the gap as far as competitiveness goes with the likelyhood of some further rate adjustments likely on the cards, but reading between the lines, as it is only the aggressive rates from non bank lenders that have got the bank rates as low as they are – it appears quite likely the banks rates will also then trickle up once the 'pressure' is of. What does that mean for 'us'? THere will always be competition in a market with dozens of lenders offering literally thousands of loan products, so it pays to look around, especially if you are buying your own home. That said, anyone with credit defaults and or poor credit history, is likley to find finance much more difficult to source at a reasonable rate in the coming months, as the groups who fund these loan types, andnon conforming lenders will be wanting to minimize risk, and when taking risk require a greater return on their investment.
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