National Australia Bank believes a fixed-rate home loan price war is set to erupt as lenders vie for investment borrowers over the next few months, News.com.au reports today.
NAB’s head of mortgages Steven Shaw said, “In the lead-up to the new financial year we’ll probably see more banks become competitive in the fixed-rate market.”
“I think the gap between variable rates and long-term fixed rates is going to narrow but it’s hard to say by how much.”
Fixed-rate products have a more competitive gap that standard variable mortgages rates where the four major banks are relatively close to each other.
Date collated by market research firm CANNEX, showed both NAB and Westpac as having the best headline rate offer.
NAB has the best advertised offers for fixed rate loans of one, two, three and five years, while Westpac is the market leader in seven and 10-year loans.
Investment borrowers who prepay interest on fixed-rate loans to get tax deductions are likely to be lured by NAB’s aggressive pricing.
