Mortgage Lending Market

The mortgage lending market can be described as the number of home loans that borrowers take out during a certain amount of time. Experts are able to look at this data and see trends in the market such as decreases or increases in the number of loans written and the average mortgage size.

When it comes to competition in the mortgage lending market this is dependent on the lenders and their mortgage products and the interest rates that they offer.

For some time now the major four banks ??? Commonwealth Bank, National Australia Bank, ANZ and Westpac ??? have controlled the largest volume of the mortgage lending market.

For instance, according to the Australian Prudential Regulation Authority (APRA), the big four hold nearly 80 percent of the total personal mortgage lending market in August.

What this means is that the major four will have more power and the ability to set the benchmark rates which most lenders then follow. Because of this they have the control to influence other lenders in the market, which means that it is harder for borrowers to get better deals on their home loans.

Especially as more of the major four take control over their competitors, for instance NAB now owns UBank and Westpac owns St George Bank. However there is a way that borrowers can beat the banks and find a better deal. If you are in the market for a home loan, find more competitive rates to avoid paying higher interest rates and compare home loans online. If you are in the market for a variable rate home loan, take a look at the table below.

Just by shopping and comparing online you may be able to find a lower rate than what the major four banks are offering. For instance, say the highest comparison variable rate for a $300,000 loan size was 8.76 percent and the lowest was 6.31 percent. If you compared the repayments on a $300,000 mortgage, you could save $478 each month and $143,400 over the 25-year term of the loan by choosing the lower rate loan.