Cheap money for banks fires home loan competition

The low cost of funds is allowing them to compete for a share of the mortgage market by lowering rates to customers. ”Interest rates being at low levels by historical standards, in addition to offshore wholesale funding costs coming down in recent years, does place the banks in the position where they are more able to compete on price,” S&P senior bank analyst Gavin Gunning said.

Australia‘s big banks are fuelling their hot competition in the home loan market by ramping up their use of cheap global financing, raising $125 billion on wholesale funding markets in the last financial year.

Read more here: SMH

    

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