Commonwealth Bank sparks interest rate war
September 12, 2011, 1:48 pm Yahoo!7
The Commonwealth Bank is aggressively targeting new home buyers, promising to beat any home-loan rate advertised by its major competitors.
The lender is inviting customers to "bring us a currently advertised rate from ANZ, NAB or Westpac and if our rate is not already lower we'll beat it with a discount on the rate for our equivalent home loan." Available to the end of September, the offer is for fixed or variable-interest loans worth $100,000 or more.
The offer is expected to further ignite the competition among the big four banks for first home buyers during the traditional spring home buying season.
A range of data over the past couple of months including low mortgage clearance rates and fewer new properties being built has experts claiming the first home buyer market is now particularly weak. The big banks look like they are being forced to do more to secure the business from thrifty first home buyers.
NSW is expecting a rush on lower priced properties over the end of 2010 after the new government announced plans to abolish a stamp duty exemption for first home buyers. Concessions of up to $18,000 on established new and used units or houses will cease at the end of 2011, giving new home buyers a big incentive to enter the market during the later part of this year.
One thing for first home buyers to keep in mind about the CBA's guarantee is that it only applies to the major banks. There are also a range of smaller banks and credit unions offering competitive home loan products. It's also important for first time borrowers to compare the fees of the different products they are looking at, not just the rates.
Yahoo!7's new comparison tool, Moneyhound, can help you find the lowest rate home loan, as it compares up to 753 home loans from 110 different financial institutions.