The big banks have continued to cut their variable rates for new customers in a bid to win more business.
Australia’s largest bank, CBA, has cut its basic home loan rate 0.10 percentage points for owner-occupiers and up to 0.80 percentage points for investors.
The cuts take their new lowest variable rate to 3.69 per cent, however, existing borrowers have missed out.
RateCity.com.au Research Director, Sally Tindall, said existing customers were being disadvantaged by sticking with their lender when banks are slashing introductory rates.
“Complacent variable rate customers have been whacked with 1.75 percentage points of rate hikes in the past four months, however, anyone willing to refinance is likely to have escaped some of these rises,” Ms Tindall said.
“CBA has cut its lowest variable rate down to a competitive 3.69 per cent, yet not a single existing customer will get this discount unless they do something about it.
“By cutting new customer rates, CBA is doing what it takes to get more of this business.”
Ms Tindall said customers were losing out by staying loyal to their banks.
“You might have had a Dollarmites account since you were knee-high to a grasshopper, but at what cost?” she said.
“The nostalgia only runs in one direction.”
According to RateCity.com.au, if a homeowner took out a $500,000 loan three years ago, on CBA’s lowest advertised variable rate and hasn’t negotiated, they would currently be paying an estimated rate of 4.72 per cent.
During that period of time, CBA has cut its lowest variable rate six times for new customers, meaning existing customers have missed out on 1.03 percentage points of rate cuts.
Ms Tindall said CBA was not alone in offering up discounts to win new business.
“A total of 24 lenders have now cut some variable rates for new customers since the RBA began hiking in May,” she said.
“Don’t bother getting mad with your bank, get even by entering into some hard negotiations or switching to a lender that values your business more.”
Ms Tiindall said two lenders committed to charging the same rates for both new and existing customers are Athena and Nano.
“A noble pledge which worked well when rates were on their way down, but in this market it’s proving problematic,” she said.
“As a result, Athena and Nano’s lowest rates are now higher than CBA’s new customer rates,” she said.
According to the latest ABS statistics, $17.9 billion dollars worth of loans were refinanced in July, the second highest level on record.
