“With the significant fall in wholesale funding costs since the start of 2019, lenders have had the opportunity to invest the fattening margin in acquiring new business,” explained Steve Mickenbecker.
NAB and Virgin Money joined the 42 other lenders who have lowered their fixed rates in 2019, while AMP and ANZ took a different approach through reducing their variable rates.
AMP’s variable rate cuts for new customers borrowing between $500,000 and $750,000 give it a “reasonably competitive” 3.79% rate for owner occupiers paying P&I, according to Mickenbecker.
ANZ increased its current discount, essentially cutting its Simplicity Plus P&I rate for new lending with a LVR below 80% to 4.09%.
“The skinnier gap between owner occupied and investment rates is confirmation of just how far demand for investment has declined, and how hard lenders are working to win their share,” said Mickenbecker.
According to Virgin Money's GM of lending, cards and deposits Johnny Lockwood, the lender’s new “competitive” rates are intended “to help customers reach their home ownership dreams without having to compromise on their lifestyles”.
Virgin is also offering double Velocity frequent flyer points on eligible new applications for the Reward Me home loan. If a customer were to borrow $500,000, they would receive 10,000 Velocity Points after settlement, enough for a return flight from Sydney to Los Angeles.
The promotion is representative of the creative attempts seen across the industry to attract new borrowers and keep existing customers happy in the midst of tightening lending conditions.
